What You Should Know Before Investing in the Stock Market

Let’s face it: we all love a good success story.

We are particularly attracted to the potential of making ‘easy money.’

And why not?

When you hear of someone making a 5-figure salary each week from trading stocks, naturally enough, this creates a fierce spark of interest. You might think that now is the right time to get into the market!

However, if you are entering the stock market just because of this, then you are almost certainly in it for the wrong reasons. In the worst-case scenario, you might just lose your capital.

The perfect example of this — the cryptocurrency boom in late 2017 to early 2018 was followed by a sharp decline in value.

Yes, a sobering experience indeed!

So, if you are new to investing, there are many things you will need to think about before putting your money straight into the stock market.

Investing in stocks is about holding a position to potentially gain money. But there is also the potential to lose money as well.

Yes, there will always be many people who have made a fortune and still will. But you shouldn’t blindly go into the stock market. One thing is for certain: these successful investors have spent their time to research a wide range of stocks, ranging from low-risk to high-risk. They understand which are the best to invest in and why.

So if you’re thinking of investing in the stock market, a recommended approach is to have a diversified portfolio. This will range from lower-risk conservative stocks to higher-risk growth stocks.

Once you have done your research — staying up to date with the news in the economy — you will have a higher chance of succeeding.

What is a good way to learn about investing in stocks?

Are you new to investing? Are you wondering what’s the best way educate yourself on stocks?

At Wealth Morning, they have a free daily e-letter on the global economy, as a well as a premium research service called Lifetime Wealth Investor.

Lifetime Wealth Investor will show you how to make the most out of investing in stocks on the following markets:

  • Australian Securities Exchange
  • New York Stock Exchange
  • London Stock Exchange
  • Nasdaq Stock Market

Their weekly recommendations are mostly medium-risk, focused on long-term dividend-paying stocks. Perfect for investors looking to diversify and uncover global opportunities.

Is investing in the stock market worth it?

You might be hesitant about putting your money in stocks. You might believe that the volatility of stocks is high, or that your return of investment is not guaranteed.

However, over the long-run, investing in stocks is definitely worthwhile. This is because stockpiling your cash entirely in the bank is a losing deal. With an interest rate of 3%, your cash will lose its value over the years due to the bank’s inability to keep pace with inflation.

In addition, there is a danger that future interest rates may be slashed even further, which will mean your money will lose even more value by the day.

To put this into perspective, let’s say you had US$5,000 in the bank in 1979.

When adjusted for inflation, the value of a US$5,000 item in 1979 will now cost US$17,683 in 2019.

By contrast, with an average interest rate of 3%, that same amount of US$5,000 would have accumulated to only US$6,000 over 40 years. That means you would have lost out!

Let’s use another real-world example.

Let’s say you had put 10% of that US$5,000 into Coca-Cola back in 1979. How much would your capital have grown?

Well, as of 20 October 2019, the US$500 that you originally invested would now be worth US$38,017. Not bad. Not bad at all. In addition to the capital gain, you would also have enjoyed nice dividends along the way.

Coca-Cola is just one example that perfectly encapsulates the long-term growth potential of stocks.

There are many other opportunities on the stock market. New ones are emerging all the time.

Could the next golden opportunity for you be waiting just around the corner?

Salman Zafar

Founder at Blogging Hub
Salman Zafar is the Founder of Blogging Hub, and an internationally-acclaimed blogger, journalist, consultant, advisor and ecopreneur. His areas of expertise includes waste management, renewable energy, waste-to-energy, environment protection, resource conservation and sustainable development.
Salman is a prolific environmental writer, and has authored more than 500 articles in reputed journals, magazines and websites. He is proactively engaged in creating mass awareness on renewable energy, waste management, sustainability and conservation all over the world.
Salman can be reached on salman@cleantechloops.com

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