There are a lot of people that run towards stock investment as a method to make some fast money. This is maybe however not the best investment option for people with short term rewards under consideration. The most suitable choice when thinking about investing in stocks is if you're fascinated by amassing funds over a long time. One such example is the investment for future desires like a savings pool for retirement and the like.
In stock investment both short term and long-term investments come with risks attached and thus nothing is actually warranted in the market. Today might be excellent and tomorrow extremely bad leading to great gains or great losses as the case may be. However, re long-term investment, it is shown according to stats that there aren't any twenty year portfolios that have lost on the market. The average returns have averaged about 10 % and these accounts all have a broadly diversified portfolio of stocks.
In the near term the market is awfully dodgy. The market will go up and then go down so if you're only thinking about investing for a brief period then this isn't the most suitable option. If you're getting close to retirement age and now beginning to take a position in stocks this isn't a good choice. The most suitable option in cases like these as a defense against inflation, instead of stocks, is to take a position in stable investments like bonds and other cash instruments. This offers more security than stocks in the near term.
So how long is considered short term? Many folks are under the myth that short term means less than a year but this is in truth not true. Re stocks short term is believed to be 5 years or less and some folks will advocate more years instead of the minimum of 5 years. A good rule is that if you will need your funds in the subsequent 5 years then stay clear of stock investment. Another point to notice is that unless you are an active trader then short term investments make no sense. If the funds being used are for retirement investment then being an active trader is also not commended.
The average down time for some markets is a year but this has been seen to last much longer a well so though for a long term investor this downtime may seen to be a lifetime it will pass but if you are a short term investor you will lose a lot depending on the market fluctuations. Stock investment will offer many great opportunities but can be devastating for a short term investor. If you know that the funds you are investing will be required for use in a short time then choose investment options that are more secure and protected. It is true that you may get lucky and make a fortune but it is also true that the risks are high and that you can lose everything.
In stock investment both short term and long-term investments come with risks attached and thus nothing is actually warranted in the market. Today might be excellent and tomorrow extremely bad leading to great gains or great losses as the case may be. However, re long-term investment, it is shown according to stats that there aren't any twenty year portfolios that have lost on the market. The average returns have averaged about 10 % and these accounts all have a broadly diversified portfolio of stocks.
In the near term the market is awfully dodgy. The market will go up and then go down so if you're only thinking about investing for a brief period then this isn't the most suitable option. If you're getting close to retirement age and now beginning to take a position in stocks this isn't a good choice. The most suitable option in cases like these as a defense against inflation, instead of stocks, is to take a position in stable investments like bonds and other cash instruments. This offers more security than stocks in the near term.
So how long is considered short term? Many folks are under the myth that short term means less than a year but this is in truth not true. Re stocks short term is believed to be 5 years or less and some folks will advocate more years instead of the minimum of 5 years. A good rule is that if you will need your funds in the subsequent 5 years then stay clear of stock investment. Another point to notice is that unless you are an active trader then short term investments make no sense. If the funds being used are for retirement investment then being an active trader is also not commended.
The average down time for some markets is a year but this has been seen to last much longer a well so though for a long term investor this downtime may seen to be a lifetime it will pass but if you are a short term investor you will lose a lot depending on the market fluctuations. Stock investment will offer many great opportunities but can be devastating for a short term investor. If you know that the funds you are investing will be required for use in a short time then choose investment options that are more secure and protected. It is true that you may get lucky and make a fortune but it is also true that the risks are high and that you can lose everything.
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