When it comes to investments, one has to be very careful about where to invest and when. Saving money is not easy, and when those hard-earned savings are invested into assets that don’t pay dividends, it can be a catastrophic financial setback.
For an average investor who does not live and breathe stocks, making money in this market can be extremely challenging, especially if one is looking at short-term growth. The risk factor with stocks is high, and most people buy on high and sell at the bottom as they are unable to hold investments for a prolonged duration. This article looks at various reasons as to why it may not be such a wise idea to invest savings into stocks even though many around you might encourage you to do so.
You are not an expert on the stock market
Investors who make their living trading stocks know much more about the market than you can ever hope to know. Stock prices can fluctuate due to so many factors that unless you have an idea of what is transpiring, your chances of making any money are next to none. Everyone gets lucky once in a while, but just like in a casino, the house will always win. It’s the same case with stocks. You might get lucky and have a particular stock rise 1000% over a matter of days. However, this is just a way to pull you in, and soon you will realize that all that was made by the trade of that stock has slowly been eater away by the losses of other shares on your portfolio.
The entire stock market, in many ways, is rigged and can even be called a ‘scam’
Top players in the stock market have many methods of acquiring information that you could never hope to uncover because the stock market is their domain, and they know all the tricks of the trade. Even these top investors earn an average return of 15% annually, which is reasonable, but remember this is what they do day in and day out. To expect that the average Joe would be able to make even close to that is hysterical unless that person proves to be unbelievably lucky. Stockbrokers out there are always pushing to get your money by saying whatever it takes to invest. It is up to you to understand that not all that glitters is gold.
Only invest in stocks if you can hold forever and not diversify
The only successful long-term solution of making a reasonable sum of money investing in stocks is to purchase blue-chip shares and hold them for as long as possible. Instead of diversifying your portfolio, invest in one well-recognized company, not likely to be going anywhere anytime soon. Invest periodically in the company’s stock when prices are low and hold for as long as possible. Buying low and holding is the only way to make good money in the long-term, investing in stocks.
Other investment avenues
Before investing in stocks, one should look at all other potential investment avenues. Sometimes if you have money saved up, it may be a good idea not to do anything and keep it on the side when a perfect opportunity arises. The investment game is all about timing, and most average small-scale investors only invest when they have funds available. When funds are available, investments should be made regardless of whether it’s in stocks or any other commodity or asset. A wise investor holds funds until an opportunity arises that is worth the investment opportunity. Just because you have a sizeable amount saved doesn’t mean you should go ahead and invest it in stocks. Hold the money until you are sure of your investment and never rush a buying decision regardless of external pressures.
If you invest in stocks in the past and know what you are doing, then investments in stocks can be a worthwhile enterprise. However, if you are a novice when it comes to stocks and the stock market in general, our advice is to stay well clear of investing in stocks and instead look at less risky and more secure saving platforms.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
