Did you know that the United States is currently in the midst of the longest-running bull market in history? How long you might wonder? Ten years as of March 9, 2019!
Now, how’s that for strong performance?
Yet, despite the stock market’s amazing decade-long benchmark, many Americans remain reluctant to invest their hard-earned dollars in stocks. Are you one of them? If so, you’re more than likely losing out financially.
But it’s never too late to get started. After all, the current market forecast remains gloriously rosy. Read on for 9 reasons to invest in the stock market now.
1. Stop Inflation in Its Tracks
Yes, everything in life comes with a little risk. But letting your money molder away isn’t doing you any financial favors. You see, money never actually sits at an arrested state of value.
Remember that little thing called “inflation”? It’s slowly eroding away at your financial future. But investing in the stock market could provide a sound remedy.
Of course, there’s no 100 percent guarantee. But the stock market generally helps investors to earn money at a faster rate than inflation knocks its value down.
One of the key strategies when it comes to investing is ensuring your money outpaces inflation. With the right financial advisor, you can invest in stocks that make sure this happens.
2. Take Advantage of Compounding
Besides staying ahead of inflation, it’s always an excellent idea from a financial perspective to invest early and save often.
In this case, age makes all of the difference. On the one hand, an individual aged 25 can expect to save upwards of $1,050,000 by age 70.
How? By setting aside a mere $3,600 per year for 15 years and then stopping. Compounding interest takes care of the rest.
On the other hand, a 40-year-old who starts saving $3,600 per year for 30 years at an 8 percent interest rate will earn far less. All told, they’ll walk away with $450,000.
3. Overcome Your Fear of Investing
But what if you can’t get past the gnawing feeling that you’re making risky financial moves by investing in the stock market? First of all, it’s time to put the mental images of 1929’s Black Tuesday aside.
The stock market has come a long way since then, and many regulations and practices have been implemented to provide investors with greater financial security. What’s more, by its very nature, the stock market is designed to go up.
What do we mean?
Each month, massive direct investments go into the stock market as a result of 401(k) programs and other types of retirement accounts. This monthly influx of cash forces prices to increase.
4. Enjoy a Thriving Stock Market
The stock market is thriving and with good reason.
When a company doesn’t perform well on the Dow Jones, Nasdaq, or S&P 500, they get replaced. The result? Prices stay high and work in your favor.
The bottom line is simple. Firms own much of the stock market, and so it’s in their best interests for prices to continue increasing. Isn’t it about time you got in on a piece of this action?
5. Invest Outside-of-the-Box
One of the greatest things about investment is that there are a variety of ways to approach it. Of course, there’s the traditional approach of investing in individual stocks or mutual funds.
But you can also do this at the micro-level. And, you can even go the macroeconomic route by investing in a basket of indexes. These map back to global benchmarks such as the S&P 500.
Options represent another avenue worth exploring. These come with lower capital investments and allow for customized strategies.
6. Meet Your Custom-Tailored Financial Future
So, how do you navigate the sea of investment options in front of you? Start by creating your own custom-tailored financial goals plan. Then, work with a financial advisor to invest in such a way to deliver the returns you’re looking for.
In a nutshell, investment in the stock market puts power in your hands. It provides you with the chance to custom-tailor your financial future. This means more freedom and opportunity down the road.
Your advisor should work with you to ensure your financial goals mesh with your ultimate risk tolerance. Once you’ve aligned these two factors, you’ll be well-positioned to fill your portfolio with the right mix of bonds, stocks, and other assets.
7. Diversify to Decrease Your Loss Risk
While you can’t completely slay the risk monster, you can lessen its power by diversifying your portfolio. This represents yet another reason you need to give investment serious consideration.
When you diversify with more classes of assets, you avoid putting all of your financial eggs in one basket. You also increase your chances for better returns.
How does this work? When stocks are down, bonds are usually up. So, you’re still winning despite lesser returns in some areas. Diversification ensures you can ride any wave the stock market sends your way.
8. Topple Useless Investor Myths
Wall Street has become synonymous with slick-suited brainiacs who spout abstract economic concepts like they’re going out of style. But you don’t have to be an investing Übermensch to earn big with stocks, bonds, and mutuals.
Sure, a seasoned investor may have an advantage over you at the beginning, but you can avail yourself of a variety of resources to level the playing field.
Besides enlisting the help of an advisor, there are a variety of high-quality stock research tools that can help you invest smarter, not harder.
Keeping up-to-date on the latest U.S. stock market news proves easier than you might think, too. And it will give you a hometown advantage.
9. Get Rich
Of course, we’ve saved the most compelling reason to invest in the stock market for last. It can help you grow your wealth in big ways.
Since 1926, the stock market’s average annual returns have hovered around 10 percent. But you have to invest for the long term to see these returns.
Investing in the stock market is like sowing seeds. If you plant an orchard, don’t expect to eat apple pie the next day. But with a commitment to investing over the long haul, you should start to reap the benefits of this 10 percent average per year.
Reasons to Invest in the Stock Market
When it comes to reasons to invest in the stock market, these are just the beginning. If you’re ready to take financial control of your life, then now’s the time to start.
Whether you’re new to investing or have been at it for a while, we’ve got the resources you need to succeed. Check out our blog for more information about achieving your economic dreams through investment.