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Here’s some pretty compelling data about why to invest in the stock market for building your wealth account, thanks to trusted Morningstar Investment Research:
During only 12 of the 5 year periods from 1930 to 2013, large company stocks had negative average annual returns. But in 72 of those periods they had positive returns.
You’ll want to read this Investor’s Business Daily article here.
Financial Woman Insights on this article:
1. The 3 compelling reasons to invest in the stock market in this article are excellent ones!
2. Buying on sale is almost always smart!
Always first see where the price of the stock market is relative to the past. Is it super expensive? Or is it a bargain?
Just like you’d check the price before buying that great pair of fall boots, or for anything else you buy for that matter, it makes sense to check the prices on your investments before making them.
Why would you not check the price of your investments before buying into them? If you happen to work with a financial advisor, ask her to show you how. (Lack of knowledge as a reason won’t cut it anymore with all of the vast resources available!)
3. As mentioned in the article, many wealth accounts have bonds in them. Remember that long term bonds lose value when interest rates rise.
4. I like that this article points out that there is nothing wrong with a strategy that guides you on when to get in and out of the markets, This proactive approach can reduce risk and enhance returns.
5. Studies use certain time frames or information to support a point. A smart and insightful question would be: in those 72 positive five year periods, just how positive were they? A return of .5 is nothing to get excited about!
If you’re going to invest in the stock market, be smart and be proactive. It’s your money!
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