The stock market has been one of the easiest ways to make money over the long-term. The market will go up and down in the short term, but in the long run it has always gone higher. Since it’s inception, the overall stock market has made an average of 11 percent annual return.
The reason the stock market keeps going higher is because the majority of corporations keep growing and making more money over the long run.
When you buy stocks, you essentially own a piece of a busniness. Your money will grow as the business grows. It is very simple to buy stock. You have to open a stock brokerage account and deposit a sum of money. It is very easy to open a brokerage account online similar to opening a bank account.
Once you have money inside your brokerage account, you look up the ticker symbol to see what price a stock is currently selling for on that day.
Lets say you have $1000 to invest to in it sold for 10. You take the $1000 and divide it buy the share price of $10 which equals 100 shares you could own. If the stock goes up $5, then your investment increases by $500 since you have 100 shares.
Companies like Coke also pay dividends every 3 months to investors. This dividend usually goes up every year as the profits rise every year.
If a company pays $2 per share and you have 1000 shares then you will be paid $2000 a year in 4 quarterly payments. Dividends stocks are great because you get paid passive income while you wait for the stocks to go higher over timed. You are literally making money in two ways.
It is important to do your research and only invest in Companies you understand and have had growing profits over the longterm. This way you wont panic if a stock temporarily goes down. You will know it’s a good business and patiently wait for a the stock to continue its upward trend.
If you don’t want to do the research and invest in individual stocks. It is easy to invest in ETFs that represent different sectors or whole markets such as the S&P 500, Dow or Nasdaq.
ETFs allows you to invest in many great companies and reduces your risk of putting all of your money in one or two companies. ETFs have ticker symbols and trade just like stocks.
Dividend Aristicrats are a good place to start looking if you are interested in investing in individual stocks. These are a group of stocks that have increased dividend payments to investors for 25+ years. Some of these companies have been in business for 100 years or more.
There are some companies in this group with over 50+ years of dividend payments to invenstors. If you reseach “dividend aritocrats” you’ll see more than 50 companies that deserve your consideration for investment.
The key is to make sure you invest in businesses that you understand.