The stock market has been around for ages, yet a lot of people are still skeptical about entering the it. It seems too good to be true – invest a little bit of money, and get a lot of money out of it. The stock market used to be very elite, and getting information about it was only possible if you ran in certain circles. Nowadays, the stock market has become much more accessible, which means nearly anyone can enter the stock market, as long as they have a bit of extra money they can part with. Still not convinced? Keep reading as we discuss a few reasons why it’s a good idea to enter the stock market this year.
There are a lot of resources for you to use
In the past, buying stocks could be somewhat of a guessing game. Sure, you could stand to make a lot of money, but there was always the possibility of you investing in a dud and this losing your hard-earned money. Luckily, times have changed and that isn’t the case anymore. You can now access a lot of information about the stock market, such as other people’s experience with a particular stock, or a specific company’s financial trends over the past few years. Not to mention that various apps can help you. You also have access to a lot of informational articles, such as this one, which helps you learn how to buy stocks in Canada.
You have options
The great thing about the stock market constantly expanding is that you have a lot of options when it comes to which stocks you want to invest in. You can support ethical businesses if that’s something you feel strongly about. You can invest in a few different stocks if you want to see what works for you – maybe you invest the majority of your money in a low-risk business, and then some of it in a high-risk business, if you think there’s a chance of it being successful.
The world is opening back up
There’s no denying that the Coronavirus affected all of your lives, on a personal and financial level. The economy took a massive hit, and it wasn’t a good year for stock trading or any form of investment. And while the world still isn’t back to normal, things are starting to look up. Slowly but surely, businesses are opening their doors, people are leaving their homes, and the economy is recovering. With the help of vaccines that are starting to roll out, the future looks bright. So why not take advantage of this by entering the stock market?
It helps your finances
Investments almost always have a positive effect on your finances. If, for example, you want to buy a house, the bank will look at your bank statements. Having a few investments in your name is always a good idea, as it will make your financial situation look much more stable. It’s also a good way of keeping yourself from spending your money if you’re an impulsive spender. It’s much harder to spend money when it’s tied up in an investment such as the stock market than it is to spend it when you have unlimited access to it.
You’ll have a second stream of income
Don’t get the wrong idea – entering the stock market doesn’t mean you’ll suddenly be able to quit your job. But a second stream of income is always nice to have. As the pandemic reminded us, unexpected things happen all the time, and they are ten times worse when you aren’t prepared for them, especially in terms of finances. A second income stream may help you to recover financially from any damage that may have occurred due to the pandemic, such as job losses in your household. You can also set this money aside and use it solely for an emergency or rainy day fund.
You don’t have to spend a lot
Many people are under the impression that to enter the stock market, you need to have a lot of extra money lying around. This isn’t true, at least not anymore. In most cases, how much you invest in the stock market is entirely up to you. It’s also important to note that what’s a lot for some, may be a small amount to others. You can invest a little bit of your savings to start with. Even if you don’t make much income from that first investment, it will be a valuable lesson in navigating the stock market.
The stock trade tends to rise
If you look at the general stock tendency over many years, the tendency is for it to rise. Sure, there are a few exceptions, as there are with anything, but generally speaking, if you enter the stock market now and invest in a stock, the chances are that the price will go up and that it will be much more valuable in a few years. Of course, it’s still smart to do your research and have a look at the stock trends for a specific business you might be interested in. Many businesses have easily accessible graphs to help you understand these trends, and if not, you can do some digging and input any information you find into a data visualization tool, which may make it easier for you to spot certain trends.
The sooner, the better
As mentioned above, stocks tend to rise. That means that if you invest in them now, you’ll likely be paying less than you would if you only invested in them next year. It’s tempting to put off things that we may find intimidating, but sometimes you just have to leap, no matter how scary it is. Trust us, you don’t want to live a life full of regrets. Plus, the sooner you enter the stock market, the sooner you’ll start learning what works for you and what doesn’t. Just think about how much more knowledge you’ll have gained after a single year in the stock market.