Why Should You Buy Shares?


History has proven that investing in quality stocks can provide greater returns than most investment instruments. This offers you the best chance in achieving your financial goals and gives you the ability to later enjoy the benefits of your money working for you.

The simple answer is to build wealth. The idea is to buy low and sell high.

With interest rates for "savings" accounts at being really low, the only way to get ahead of inflation is to invest.

Having said that, investing in the stock market is not a guarantee of wealth – in fact it is quite possible for the investments to perform badly and you end up losing all your money. All investments carry some degree of risk – it is something you need to consider when assessing each and every investment.

I like many people, use experienced and qualified financial advisers to help formulate my investment goals or to test some of my ideas. The experienced guys can help in assessing how realistic these goals are and the level of risk you might expect to take on. Still I take the time to teach myself by reading financial sites and asking questions.

So before you get started, there are a few things that you should be aware of before 
committing your hard earned money to the stock market. 

As a starting point, you need to ask yourself this following questions: 
What do I want to achieve
How long am I planning to invest for
How much risk am I prepared to take
Where should I invest: the sharemarket, bank deposits, property?
Being able to answer these four questions will help you decide which investments are appropriate for you and your money.

There are two ways to access the stock market: directly and indirectly.
Direct investment means buying the shares in a single company and becoming a shareholder.

Indirect investment means investing in the stock market through a third-party broker, e.g. Allan Gray.

If you are a beginners it is best if you are using a professional fund manager to buy and sell stocks  for you via funds, rather than having to make these decisions on your own. This means you are not putting all your eggs in one basket (as you're not just investing in one company) and it means you can ride out any bumps in the market.

If you have the time and expertise to invest directly, you can do so via a reputable online trading and investment platform. These platforms allow you buy shares from any company listed on the stock exchange and various overseas exchanges.

A lot of the platforms these days have 'dummy' or 'virtual' portfolios you can practise with.
Keep in mind also the costs involved in buying funds, trusts, shares or ETFs because they vary hugely, and higher fees can easily eat away at future returns. To ensure value for your money compare charges on different products.

If you take time to plan, prepare and educate yourself on share investments and you will be nicely rewarded.

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