Many people starting in the stock market think of it like gambling, sometimes you win and sometimes you lose. Worst off, if a recession comes and brings down the value of stocks it will be like 1929 when the stock market crash that started the Great Depression that lasted almost an entire decade. Stuff like that sounds really scary that one moment you could be out on the streets with no home. But then there are people who made it big in the Stock Market like Warren Buffett who has $60,000,000,000 worth invested that he can pull from any time he wants, now that’s a nice college fund or retirement. The Stock Market can be a risky game but investors over sea even invest in our stock markets instead of from their own countries. The reason why they invest here is because America has always had a knack for making big business, America is a growing country and when you make it in this country you really make it big and pretty fast as well. Like the article titled “The Tim Grittani Story: How a 23 year old turned $1500 into $128,000 in 1 year”, Tim Grittani was a 23 year old man who invested only $1,500 and came out with $128,000 in a single year; Now that’s the difference between a nice new car and a 15 year old car. As a matter of fact recently the Stock Market has hit an all-time high says Jamie Sturgeon of Global News, and the date of this published document was November 18, 2013 to give you an idea how great the market is at this time. Now if you a smart investor you would have invested a few years ago when we were in a recession, then you value in the Stock Market would have skyrocketed. You might not be sitting at home typing this paper now if you did, you might be making investments on companies you see a potential growth in and ... ... middle of paper ... ...y can get into it, can also be a great way to make your bank balance look large very quickly. The Stock Market is a financially smarter choice when considering alternative savings accounts, or CDs (Certificate of Deposit). The Stock Market will drop, it dropped about eighty-four years ago. If people had money to invest in the Stock Market at that time they would have been very rich when the market came back when World War II jump started the economy around the year 1939 when European countries started trading with America for supplies. Just remember, when the stocks start falling don’t sell it in a panic, hold out until the Stocks come back up then sell them to make a profit. Investing in the Stock Market can be tricky but once you have mastered it, you can then master your financial status and never worry about retirement, college fund or any other accidents again.
You might be tempted to dip into your retirement fund for a major purchase, find the will to resist. You’ll pay extra fees and taxes, and you are robbing your future self. If you leave it alone, your money will continue to grow year after year. Your gains can be reinvested and you’ll earn more than you would have with just a small chunk of
Investing in stocks involves owning part of a company’s equity which effectively enables the shareholder to receive a portion of the company’s earnings and assets in form of dividends. Stocks are generally categorized as either common stocks or preferred stocks whereby common stock allow investors to vote on key issues but do not guarantee of dividends (Markowitz 78). Preferred stocks on the other hand do not provide voting rights but assure stockholders of dividend payments. Investing in stocks offers investors comparatively high returns relative to treasury securities but the investments also have high inherent risk. Stocks are purchased through licensed stockbrokers who range from the discounted order-taking online brokers, to the pricey full-service brokers and money managers (Sourd 112). Despite the type of broker an investor opts for, the stock market has the potential to generate high returns through an investment strategy. One of the main strategies employed is diversification which involves the purchasing of different stocks with varied performance and rates of returns in order to spread out the risk of the individuals stocks across a portfolio. Investing in stocks is therefore one of the most profitable alternatives of personal financial planning, and should be considered as one of the investment vehicles that generates an additional income stream.
In an era of superficial prosperity and indulgence, most Americans “threw all care to the wind” (Danzer, Klor de Alva, Krieger, Wilson, Woloch). Ron Chernow observed that “in the 1920s you could buy stocks on margin. You could put 10 percent down and borrow the rest against your stocks.” Buying on margin is exactly what reflected the American public of the 20s- reckless and optimistic. By using leverage to invest, buyers can maximize their profits through the stock in a bull market ("Buying Stock on Margin"). This idea of using brokers’ money to gain profit for themselves appealed to many Americans. The great bull market that had lasted for six years further instigated irrational exuberance- or the extreme confidence in investors that they overlooked the degrading economic fundamentals- in the American public (Shiller). However, this overvaluation proved to be deadly. Margin loan, like a double-edged sword, eventually stabbed Americans in the back- and stabbed them hard. The
There are many different ways to save money and there are different things to save for. A savings plan for an immediate want is apparently different than a savings strategy for retirement. One may choose to select stocks, bonds, or mutual funds for a savings strategy, however, my personal choice is to invest in bonds first, then mutual funds.
When setting up a stock portfolio there are things one should look into. First off, one should know what is currently happening, not only in the stock market, but in the economy as well. Researching stock indexes such as “The Dow” and the “S&P 500” will give you general stock performance. The Dow Jones Industrial Average only tracks 30 large industrial firms in hopes of getting a sense of where the market is heading. The S&P 500, on the other hand, tracks 500 stocks which may give the investor a better overall picture of where the market is going. Which ever the investor may choose to use, the idea is to find out whether stock prices are going up or down. Also important to know is state of the economy. Certain stocks tend to perform better or worse depending on the state of the economy. Knowing which stocks tend to perform well at a given state will help the investor choose which type of stock is best for the given conditions.
The stock market is a vehicle to invest money. It is where consumers buy and sell fractions of companies, and is referred to as stocks. A proven method to achieve wealth while keeping up with inflation, comprised of publically held companies who offer goods and services that are used by the general public daily. Companies sell stocks to public investors in a free and open market environment on a daily basis, which is an effective strategy to build a sound financial future.
Things don’t always work as they should on Wall Street. However, financial markets send signals about the future of the economy. Markets can move in advance of what is known to the general public. In a broad view, markets seemingly anticipate political events. In other times, the markets will anticipate economic events long before the investing public understands what’s going on in the general economy. The market is also good at discounting a transformational event. When the market more than anticipates all future revenues and all the future profits that would accrue to the new phenomena, a bubble or mania develops. The most interesting part of the mania is the repetitive nature of the phenomenon
The stock market is a volatile, unforgiving battleground where fortunes can be made and lost within minutes. The first major stock exchange in the United States, The New York Stock Exchange (NYSE), dates back to 1792 when it acquired its first securities. Since then, the stock sarket has reached an astronomical size, with a market volume of over twenty trillion dollars. This success is not without its setbacks, though. The stock market crashes of 1929 and 2008 have single-handedly led to the worst economic recessions America has ever seen. Considering the sharp ramifications of a market crash, it is important to understand why
Many people began to invest the money they had into the stock market in hope to gain more money back. In the stock market “sixteen million shares of stock were traded; the industrial index dropped 43 points, wiping out all gains of the previous year; stocks in many companies became virtually worthless” (Brinkley 603). Due to the overabundance of people trying to invest in stock, and due to the low consumer demand many companies relied on their previous earnings. The previous earrings of the companies soon declined because of the number of investors. The stock market crash had a drastic downfall with the economy because of the people who were recklessly investing. Even American banks were investing in the stock market and making unwise loans. The bank made investments in the banks with the money they thought they would get through the repayment of loans. Therefore, “when the stock market crashed and the loans went bad, some banks failed and others made the crisis worse by contracting already scarce credit and calling in loans that borrowers could not pay” (Brinkley 604). By spending money, they did not have, the banks began to fail and many Americans lost out on more
Personal financial planning eventually leads to secured retirement years; this is the purpose to plan for the future. With a volatile and erratic economy, and social security benefits undetermined in regards to having enough money to comfortably survive after retirement is critical. There is no magic ball to tell us what the coming years will bring; this is why it is up to each individual to have their own financial lives under control. Having a concrete financial plan now will secure an increased comfortable future.
When you buy a stock, what you are in effect, receiving is partial ownership of a company so that your fortunes rise and fall with the fortunes of the company. In good times, you benefit and, in bad times, you could lose money. However, taking a long-term approach to stock investing and building a balanced portfolio should normally result in higher accumulation of wealth over the same period of time compared to real estate investment. It is also possible to use leverage in stock investment with the use of margins though this should be judiciously done to avoid margin calls, which can happen when the equity in relation to the amount borrowed falls below a certain level.Among the advantages of stock investment is liquidity, which means that stocks can be sold quickly and easily. On the down side, stock prices can be highly volatile and often driven by market sentiment. If the company goes bankrupt, your investment will be
While it is very important for young individuals to start to save and invest for their retirement, there are aspects that they should consider before jumping into investing into securities. Those subjects are cash, enough insurance, should you buy a home, how secure is your job, how much risk can you handle, equities are risky, get started, do everything, be flexible, and can you save and invest too much. These ten aspects should be looked at, analyzed, and taken into very critical thought before saving and investing into securities.
me on a volunteer project I did in high school. The summer after my junior year
Have you ever invested in the stock market? If so, do you know where your money is really going? The stock market is a risky business and it can make or break people’s lives. The stock market is used to daily to keep America on its trembling feet; it’s also being used at this very moment to cheat people out of money for personal gain. This happens every day in the stock market and its evolving rapidly, super computers that can trade faster than a blink of an eye, social media trends that can predict share values, and intricate stock market schemes that are getting harder and harder to find and take down. While the stock market keeps the world turning and the economy steady, the stock market is also being used in manipulative ways that are not always legal.
The stock market is an essential part of a free-market economy, such as America’s. This is because it provides companies the capital they need in exchange for giving away small parts of ownership in their company to investors. The stock market works by letting different companies sell stocks to gain capital, meaning they sell shares of their company through an exchange system in order to make more money. Stocks represent a small amount of ownership in a company. The more stocks a person owns, the more ownership they have of that company. Stocks also represent shares in a company, which are equal parts in which the company’s capital is divided, entitling a shareholder to a portion of the company’s profits. Lastly, all of the buying and selling of stocks happens at an exchange. An exchange is a system or market in which stocks can be bought and sold within or between countries. All of these aspects together create the stock market.