Why Stocks?

General Articles

Many people forget or do not know what it means to share, and consider the stock is a situational figures, causing profits and losses for the owner. May also for you, share it as unknown object moving at will and therefore it is an object of speculation shares or roughly: gambling.

In fact, the stock is proof of ownership of a business / business. Own shares is tantamount to having a business. Because business is an operational activity to generate profits, the profits of the company will be reflected through the share price upward. Each share is owned not a blank sheet , shareholders are part of the business that owns. In general, the value of stocks will rise over time as the business successful, profitable, and growing increase in size

The results of that offer of Shares

For developing countries such as southeast asia region, on request of a number, then I’ll call it 20% ~ 30% per year. Not that all stocks will produce results they will be, because the company’s performance is different. Each time of course there’s the company that its business flagging, there was a brilliant business, there is a loss, some profit biasa2 course, there is a fantastic profit.

It may sound small, 20% ~ 30% is not going to make anyone rich  , how  a Warren Buffet may be the richest man in the world by investing in stocks? The answer is compounding result, compounding result is how you play the results you get from your stock profit in one year , the results obtained are reinvested. If in-averaged, return Mr. Buffet per year, about 26%, so it’s not a crazy number like a profit of 100%, 1000%, or even more.

Other investments what can offer such high returns? I may say, I have not found it… Perhaps the nearby that is investing in property, particularly on strategic locations.

Here surplus stock than property investments are very liquid stocks, and that the low entry barrier. Liquid means the stock could be sold whenever you want on the open market day (Monday to Friday) without the need to bother looking for a buyer, if you sell the property we have struggled before finding a buyer.

Risk of Investing in Stocks

Companies can lose money, business can be lonely, management can be dishonest etc. If the company loses it will be reflected in the stock price down so that its shareholders suffered losses. But all investment vehicles have risks. Sovereign Debt Instruments , for example, in the crisis-stricken Greece, the country is unable to pay. Another gold example, which people say always goes up, by the end of 2011 gold has decreased by 20%. So it’s actually the same, all at risk. Perhaps there is a reason that gold, though down 20%, will rise again and will set a new record. Well maybe, but keep in mind that stocks are so. A good company, working right, will grow even as the financial crisis strikes. For example, Indonesia has passed the toughest crisis of the year ’98 and you can see the fact that there are still many companies that are still standing now and have grown bigger now. My message, as an investor we can minimize our risk by choosing shares in a good company, working properly, posting profits and growing.

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