How Has The Stock Market Benefited The Common Man over The Last Few Years


Jovan Graham, Negosentro  | Stocks market is one of the most promising places to invest your money. It may seem like a maze to the newbie, but once you have the basics right, the stock market transforms into a world of opportunities for the smart investor. It is all about taking calculated risks and managing the odds correctly to open the doors to financial security and opulence.

Stock ownership and economic growth

In most first world countries the economy is growing and fast. A steady economic growth represents a fertile market for new companies and new jobs. It generates income, and that creates a buyer’s market. It boosts consumer demand, and that increases the stock prices. Buying company shares right now will be much cheaper than buying the same share two months later. Therefore, if you invest in two shares of a growing company right now, you can sell off the stocks then when the share prices are higher to generate more profit.

Easy and transparent

Many do not believe in the transparency of stock markets. However, the buying process is so simple that it automatically removes all the grey areas from the transaction. You can choose to buy your share online, all by yourself or you can purchase your stock from a broker. All you will need is an account and some cash to invest.

Selling them is as easy as buying them. You can sell your stocks anytime. It can depend on the increasing prices of the stocks or a sudden need for money on your end. The easy accessibility, liquidation and secure transaction options add to the transparency of the stock market investment process.

Dividend funds and stock prices

As the days go by, the stock market prices tend to increase. Certain kinds of stocks and shares provide steady earning in the form of profits or dividends. Once you invest in the stock of a growing company, you can receive dividends in the form of annual payment. These payments are extra income on top of the selling price of the shares. Dividend funds can easily become a replacement of the 401K. These funds are great for building investment portfolio over time.

Escape inflation

In first world countries, stocks have always represented an average annual return of about 11%. The annual inflation rate is approximately 1.9% for the year 2017 in Australia. The rate of return is way ahead of the rate of inflation, which means it keeps the stock market investors ahead of the inflation curve. The key to overriding any impending inflation is to buy and hold the stocks when the prices temporarily drop. One of the best ways to understand the rates of inflation in Australia is to keep an eye on the gold price indexes.

The best way to enjoy the current buyer’s market is to invest in different types of stocks at the ASX. Always include the large cap, medium cap and small cap companies on your list before you pick your company market shares.