Financial market investing or stock buying has historically been one of the most favoured investment options for the middle and upper classes. In fact, renowned billionaire Warren Buffet swears by stock buying as a way to increase your financial worth and the size of your emergency funds.
However, financial market investments were only limited to the middle-aged group, people in their 30s or 40s until recently. This gave them relatively a short period to amass wealth through company stocks.
Fortunately for young people, there is a plethora of free and paid resources today that can give them a worthy introduction to financial markets and how to invest in them. A good stock trading programme can also wizen up the younger generations to the multiple benefits of stock investments.
If you are inclined towards taking up a stock trading programme and want to know if it would be worth your time, here’s a small snapshot.
What are the major advantages of investing in financial markets across the world?
Any experienced trader worth their salt would tell you that stocks are an important addition to any investment portfolio. Owning stocks of rapidly growing or established companies can help you protect your savings from inflation rates and taxes and help you maximize your returns on your investments.
Let’s look at the major benefits of investing in stocks today.
- Build: If you review historically, stocks have always given better returns on investments as compared to savings in the form of cash or bonds. Holding your stock investments over a long period can even smooth out market fluctuations.
- Maximize: If you own significant stocks of a particular company, the organization can additionally pay you dividends which can supplement your investment income.
- Protect: Stock investments grow along with market rates which keeps your savings relatively impact-free from taxes and inflation.
Do the benefits of investing in stocks vary as per their nature?
Yes! Most types of stock investments can be divided into three categories—common shares, preferred shares, and dividends. Here are the top benefits that each stock asset class can provide you.
Major benefits of investing in common shares
- Capital growth over a long time
- Voting privileges in running the company
- High levels of liquidity
- Tax-efficient income
Major benefits of investing in preferred shares
- A reliable stream of regular income
- Higher-income value than common shares
- Diversity in the nature of shares
- Lower levels of risk compared to common shares
Major benefits of investing in dividends
- They can increase the total value of your investments by a lot
- Higher-income levels compared to common or preferred shares
- Taxation levels on earnt interest are quite low compared to other asset classes like bonds and GICs
- The higher stability of your investments
A good stock trading programme can help you learn how to choose the right stock options that can maximize your investment returns. Start your search for appropriate financial investing courses around you from today!
