Investing in the stock market as a way to get additional income
Investing in the stock market as a way of obtaining additional to the basic earnings income is gaining popularity in the world. This contributes to the growth of economic literacy of the population. For the time of existence of the market there have been periods of UPS and downs, and this should not frighten the market it is possible to earn and on growth, and on the fall. More in detail about it we will talk a bit later, and now make the following conclusion: the stock market does not give stable yields, in different years, the result may differ significantly. For example, in early 2009, the shares of one company can be bought for $15, and at the end of the same year - to sell at 90. Yield would have amounted to 400% per annum, but this result is far from the average value, which have experienced investors, selling such time horizons is about 20 to 40% per annum. If you have the necessary knowledge and expertise to analyze the behavior of securities on the stock market can be ahead of inflation and receive a yield that exceeds the profitability of Bank Deposit.
Those who start a separate process of investing in the stock market, to become a private investor. In addition to the private investor (such as most of us) on the stock market are also banks, mutual and pension funds, and investment companies. The number of clients - natural persons, who opened the account on the exchange is growing from year to year, which proves the high interest of people to invest in the stock market. Indeed, if this were not so profitable, the people wouldn't have to deal with it. Let's face it, the reason of such an interest?
For the developed and profitable stock market is always working and growing economy. Ask yourself a question: how did the stock market arises growth of money? If there is no real ground, which allows you to create income in the financial market, how do they arise? Financial pyramid? «Soap bubbles»? No. All this is already a lot of times we went, but only since 1999, the stock market in some countries became really working. And the reason for this is that to make money in the stock market is possible only provided that the company, whose shares are becoming private investors, operate, develop and profit. So, here are the main source of income on the stock market - profit companies. Acquiring the share, you essentially get a part of the company, and if this company operates and receives income, together with her work and bring income and Your money.
Profits of companies all over the world, is closely related to the rate of economic growth. If economic growth rates are falling, or in the economy enters a period of recession (economic recession), the profits of the companies are reduced (and they may incur losses). In this case, shares fall in price, and the investor, who bought the shares, may suffer a loss. But there is good news - you can earn and during the fall of the market. For more on this later in the section «Long and short positions»
Of course, in order to successfully invest in the stock market, knowledge is needed. You've got to learn to understand how the stock market works, what are the principles of his behavior, how to analyze the behavior of the securities and the activity of the companies. Note, however, that in order to receive income in the stock market, you don't need to independently build the company, to carry out marketing, management, production activity and etc. For you have already done this the other. Essentially, this is the team of professional managers, who works for You, as well as to the other shareholders. Their activity is reflected in the financial statements, prepared by professional accountants and check reputable auditors. Statements and plans of the companies constantly examine and evaluate a number of professional analysts. All these people work for you - private investors. You will only need to learn to understand that such an investment, how to Orient themselves in the flow of information, daily coming from the stock market and how to effectively turn their knowledge and skills in the money. Because the stock market - this is for those who know and know how the money to make more money.
