Reasons to Invest in the Stock Market

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Category: Investing/Stocks

Reasons to Invest in the Stock Market
by Gilbert Stockton

The stock market is one of the most popular forms of investment for investors. If you don't
invest yet, you might be wondering why someone would put money in the stock market. The
truth is that there are a number of reasons to invest in the stock market. Let's look at a few of
the best reasons that you might want to invest.

The number one reason that people invest in the stock market is for their retirement. If you
start when you're young enough, the stock market is a fantastic tool to grow your retirement
fund. The benefit that you have when you are young is time. This helps to average out the risk
of the stock market because you have a long time to win. You can usually tolerate risk more
when you are younger, because the stakes aren't quite so high. You probably don't mind
investing in risky things at the beginning so you can build up your nest egg. Then over time,
you can get into some more “cash cow" type of stocks and build steady growth. If you
invest over a long period of time you can use the dollar-cost averaging method to steadily grow
your portfolio. The basic idea behind this is that you periodically and systematically invest the
same amount of money in a certain stock over time. This way you will be unaffected by the
market and will have a large amount of stocks by the time you're done.

While it helps to start early, you don't have to. There are many scenarios that people have, that
will keep them from investing until they get older. There is nothing wrong with that at all. It only
takes one really good investment to make up a lot of years. You could have waited until you
were 60 and then invested in Google and been completely fine.

Another reason that someone would want to invest in the stock market is for a career. You
don't have to wait until you're retired to reap the benefits of your work. Many people, called
“day traders" make a living out of buying and selling stocks every single day. They
make multiple trades every day and make their living off of the daily fluctuations in the stock.
They aren't in it for the long haul. Instead, they are there to make the quick dollar off of the
market “ups and downs". This is another viable strategy and has been used
successfully by many people. If you don't know what you're doing, you could stand to lose a lot
of money doing this. If you don't do your homework, you'll most likely just be guessing on what
a stock will do. In this scenario you might as well go to Vegas and roll the dice. Your odds of
success are similar.

Besides these two obvious reasons, one of the most overlooked reasons to invest in the stock
market is for the fun. There isn't much better than picking a big winner in the stock market.
When you pick a really big winner and sell just before it goes down, others will look at you like
you're a genius. You may have been guessing, but they'll never know the difference.

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Tags: invest in the stock market, investing, stock market investing

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