Despite the craze around crypto and other investments, the stock market is still a great place to invest your money.
As with anything that has been around a while, the only reason it has existed as long as it has is because it works.
It all comes down to risk, reward, and ROI.
How Long has the Stock Market Existed?
The New York Stock and Exchange Board was formed in 1817 as a formal organization to organize the exchange, which had previously been informal. The name was changed to the New York Stock Exchange (NYSE) in 1863.
For close to two centuries now, the stock market has existed and thrived.
That means that the Stock Market has been around for a little over 200 years.
In all that time, it has weathered a lot of storms, including the Great Depression, and still come out on top as one of the best places to invest your money.
Why is the Stock Market Still a Good Investment?
The recent volatile price action in the stock market has been scary for some investors, especially younger ones just dipping their toes into putting money away for the long-term.
The important thing to remember is that our world has repeatable patterns (and so does the stock market).
Simply put: the stock market always corrects itself.
What goes up must come down, but what comes down must also go back up.
It might not happen right away, and it might not happen exactly how you predict, but it will happen.
In the long run, the stock market always goes up. So, when you have money invested in the stock market for 10, 20, or even 30 years, you are almost always going to see a return on your investment (ROI) as long as you don’t panic and sell when the market is down as well as investment in stable companies.
Remember: Of course, there are always going to be risks involved in any investment, but if you are diversified and have a long-term plan, the stock market is still one of the best places to invest your money.
Related Read: How Stock Market Simulators are Helpful for Investors
What About Other Investments?
There are a lot of different investments out there, and it can be hard to know which one is right for you.
You can break down investments into both alternative and traditional investment strategies.
Alternative investments are things like crypto, real estate, and private equity while traditional investments are stocks, bonds, and mutual funds.
A good rule of thumb for investments is that an investment is anything that you can put money into now with the expectation of getting more money out of it later.
So, when you’re looking at investments, you want to think about things like:
- What is the risk?
- What is the reward?
- What is the ROI?
- How long will it take to see a return?
- What are the tax implications?
These are all important factors to consider before investing in anything.
Do you Need to Hire a Financial Advisor or Broker?
If you are new to investing, you might want to consider hiring a financial advisor or broker to help you get started.
A financial advisor can help you create a long-term investment plan and decide which investments are right for you.
A broker can help you execute trades and give you advice on which stocks to buy and sell.
Both can educate you more on the way that securities market works.
There is no hard rule on needing to work with either as you can invest in the stock market on your own.
You will need to do your own research to find the right company or individual to work with if you decide that you would like help when investing in the stock market.
On the flip side, you could also invest a small percentage of your income each month with a broker and use their time that they give to you to learn more about the stock market and how it works so that eventually, you can begin to invest on your own.
If you do decide to work with a broker or advisor it is imperative that you find someone who you can trust with your money as well as give you good advice.
In short, do your research! The last person you want to hire to handle your hard earned cash is someone who has a history of being under SEC investigations or has been in trouble with the law.
There are a lot of people who claim to be experts in the stock market, but you need to be careful and make sure that you find someone who is qualified to help you before handing over your hard-earned cash.
What If I Don’t Have a Lot of Money to Invest?
No big deal.
You don’t need a lot of money to start investing.
In fact, you can begin investing with as little as $5-$20 per week.
That may not seem like a lot, but if you start investing now and continue to invest regularly, that money will grow over time.
As a matter of fact, if you invest $20 per a week for a year, you will have invested your first $1,000 into the stock market.
Now, a thousand dollars isn’t going to make you rich, but if you continue to invest that money each year and allow it to grow, eventually, you will have a nice nest egg.
Plus, with most things in life, you will be grateful for the time you get to learn and grow your investment portfolio, rather than being anxious about making a lot of money right away.
Of course, if you have more money to invest, you will be able to grow your portfolio faster, but don’t feel like you need a lot of money to get started.
You can begin small and invest more as your earnings and portfolio grow.