Money requires time to grow. A good way to give your money the opportunity to grow is by investing in stocks. Stocks are available in various safe options that cushion you against the daily fluctuation of prices. Thus, you minimize risks of your principle investment disappearing while you maximize options for your money to grow. You need to invest your money for some reasons including the opportunity to have something that will sustain you during your retirement. Planning for the future may not be easy, but you can be sure of needing money to take care of yourself in the coming days. The following are reasons why you should invest in stocks.
To beat inflation
People who do not invest their money will find it difficult to afford things in future because prices will be higher than they are today. You must invest your wealth at least to beat inflation and preserve it. Keep the purchasing power of your, and a good way to do it is by ensuring that as money weakens, your investments increase to compensate for the loss. Stocks offer a valid option for realizing this goal.
Blue-chip stocks are a good opportunity for earning dividend while also beating inflation. These stocks are for well performing large companies whose business foundation is strong. The companies offer dividend payments annually, and their stocks are always growing. Having a portfolio of blue-chip stocks will ensure that over a few years, you beat the savings rate of having your money in the bank. Furthermore, you also get more money to increase your investment by channeling back your dividends. You may also rely on the payouts for your other uses on a yearly basis.
You can get your money back fast
Many investments tie your money for several days or months before you can get it. Thus, it is quite hard to move money from one opportunity and take it to another growth offer. However, stocks allow you to settle your account in a day and get your money for other uses. The liquidity options make it a good way to invest your extra money as you await other offers such as growing your business or finding other high-interest ways to use your money. As an investor, you should always look at time as a valuable resource. Delays in obtaining your money eventually hurt your opportunities for growth hence the benefit of going with stocks.
You can do it with basic knowledge
Stocks do not need sophisticated knowledge to start. You need to know transaction costs and the way buying and selling works. After that, you need to find companies whose history of pricing is great, and they pay dividends. Luckily, there is always an index for each stock market that will include all the major well-performing stocks that you can consider. After that, you will only need to follow the constitution of the index and adjust your portfolio accordingly. You will be safe from the need to follow the up and downs of the market on a daily basis. The behavior is usually relevant for day traders and not investors like yourself.