04 Dec 3 Reasons Why You Should Invest in Stocks
Equity investments (also known as stocks) are one of the many options you have for growing your hard-earned wealth. If you are committed to your long term financial goals, then you should be able to get moving in stock investing as early as possible.
To help you further understand why this is an option that you should consider for your financial strategies, let me narrow it down to just three (3) main reasons why you should invest in stocks:
- Greatest Potential for Returns
We are all after the returns, and investing in stocks can be a great way to go if you are in it for the highest potential growth (as compared to other options like bonds).
Since the stock market typically grows over a period of time, this is a good strategy to ensure financial freedom when you reach retirement. The stock market has its downs, but according to historical data, it always manages to recover from them, and it has the potential to deliver strong long-term returns over time.
However, the stock market could be risky if you don’t understand how it functions. Thus, it is a must to avoid emotional investing, and instead use it to your advantage. Since investing is not a one-size-fits-all thing, your strategies should be tailored depending on your goals, priorities, etc.
- Stock Market Dips are Advantageous
You might be holding back because of the risks of stock market drops. Reasonable as it is, here’s what you need to know: Yes, the value of stocks has the potential to drop in the short term, but you can ride on it by through a long-term investment approach.
As long as you commit to your goals and aren’t persuaded by declines (which happen naturally), you will succeed in stock market investing. If you choose to sell your investments during stock market dips, you’re missing out on potential strong returns when the market recovers, which also means losing your hard-earned money.
- Enables Diversification of Portfolio
To help you achieve financial success, you have to diversify your portfolio with a mix of different asset classes, including stocks and equities to make it sustainable. As a wise investor, your long term goals will be a lot more feasible once you start diversifying your investment portfolio.
Remember that investing in a single vehicle is comparable to an all-in bet, which can posts smaller returns and have a higher risk of losing more money.
Again, there are many options on how you can make this happen. But it is still important to establish your financial goals first and take a look at other several factors (age, time horizon, etc.), for you to come up with a bespoke plan. It can also be well worth it to consult with a trusted financial advisor, who can help craft a plan to reach your long-term goals.
At LexION Capital, we help our clients make their financial dreams realities through hands-on advice and well-diversified investment plans. If you’d like to learn more, let’s start a conversation.