Why You Should Invest In The Stock Market

By Yhordan Serpentini | January 29, 2022

Investing in the stock market can be very intimidating for new investors, but there are so many positive aspects about the market that there is really no reason why you shouldn’t be investing. If you’re new to the stock market, you should do an immense amount of research before you start investing to ensure that you know both what you’re doing and when to sell or keep your stocks. One of the most important things you need to learn from the stock market is to have patience. This is not an overnight transaction, it is years of building financial profit which can be well worth the wait depending on how invested you were—no pun intended. Here is why you should be investing in the stock market.

Potential To Earn More Than Invested

The stock market and cryptocurrency both give you the privilege to earn more money than you initially invested, however, that is not to say you can simply waste your money and buy random stocks, or excessive amounts of a single stock. Never bet everything into one outcome. Always prepare for the worst by having backups. You should also buy stocks from a variety of reliable companies with decent track records, rather than solely on one company, or multiple companies that don’t record their analytics.

Yes, it can be tempting to buy cheap stocks from companies you’ve never heard of since you’ll be benefiting not only a small business, but also potentially yourself if that business grows exponentially; however, there is a difference between investing in small businesses, and recklessly investing. Research before you ever buy a stock, make sure that you know these business owners, whether small or big, know how to handle the invested money, as well as you know where your invested money is going—otherwise, you’ll be setting yourself up to lose money.

Potential For Passive Income

You will see several examples where I compare the benefits of the stock market and cryptocurrency, but that does not mean the cryptocurrency is discouraged. I will soon have another blog discussing why you should also invest in crypto. One of the biggest differences between cryptocurrency and the stock market is that the stock market allows for passive income. This is because, unlike cryptocurrency, you do not need to check on your stocks every few times a day since they will take up to a few weeks before any noticeable change grabs your attention. This is one of the biggest perks about the stock market, as you are basically earning passive income while only needing to check maybe once or twice a week at most.

Again though, the amount of profit from this passive income only depends on how invested you are in the market. The more stocks you invest, the better the profit, however, it can take years before you receive any actual benefit. One of the most common reasons people invest in this slow-building process is to sell all of their stocks once they retire. It may sound ridiculous to earn only a few hundred thousand after waiting nearly 20, 30, or even 40 years; however, those additional thousands of dollars can make all the difference in the future.

Countering Inflation

Another good reason to start investing in the stock market as soon as possible is due to the market’s rate of returns often beating the United States’ fast-growing rate of inflation. The one key thing you should be aware of is that during a period of inflation, your profits in the market will likely be slower than usual. In some cases, the stocks may even go down which is entirely normal. The important thing is that you don’t panic and immediately sell your stocks because sometimes buying more stocks while their prices are lower can be a better option—as mentioned earlier, it is crucial that you know when to give up on your stocks and when to keep holding on, in most cases the latter wins.

Access To Easy Market Liquidity

As mentioned before, the stock market allows for a much longer duration before the pricing of assets drastically changes compared to cryptocurrency where the price of an asset can dramatically change over the course of a few hours. Meaning, if you wanted to invest in a company, the prices of their stocks would likely increase or decrease by a few cents or a few dollars over the course of a week, giving you better access to sell or buy more stocks depending on how comfortable you feel.

Why You Should Invest In The Stock Market