Major Reasons in Investing in Stocks
Major Reasons in Investing in Stocks
In essence, stock is the portion of ownership of a general company. When you buy stocks, you became a part owner of the company you purchased. Stocks are being traded in a stock exchange or stock market wherein there you will buy and sell stocks. You must have a stock broker before you can buy or sell stocks in a stock exchange. There you can open an online stock trading account so that you can buy or sell stocks directly.
I known the word "stock" six years ago when I worked in a company in the Philippines. It was provided to me by the company since it is one of the benefits for all the workers. The number of stocks given is according on the job position. That stock aid is without a doubt a big help for me and my family in terms of our financial demands in that time.
Investing in stock is a nice investment you can ever have if you only know when and how to buy stocks. You should have also knowledge, discipline and perseverance in managing your portfolio in order to have an excellent profit from stocks. Bear in mind that you can only lose money in stocks in two events: at the time you buy and sell it.
In addition, one good thing about investing in shares is that it will give you a higher earnings in the long period than other investment schemes available presently. Long term investing in stocks means you will buy shares regularly to a hand-picked stocks greater than 5 years.
In the Philippines, blue chips are those stocks included in PSE Composite Index (PSEi). According on the information from PSE and BSP, the stocks invested in blue chips will earn you a 14% average annual total return based on the past performance of Philippine stock exchange from January 1989 to August 2009.
In addition, for the last 20 years, investing in stocks earns you higher average annual total profit than Treasury bills (T-Bills) and savings account with 11.0% and 2.3% average annual total returns, respectively.
Therefore, investing in stocks, particularly blue chip stocks, is the best way in order to earn higher return in stocks.
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