Stocks of reputable companies perform better in the short and long term. Therefore, investing surplus funds in stocks is a time-tested option to build wealth over time. The latest software tools allow for the detection of stock trends because stocks could move in either a positive or negative direction. However, you cannot accurately predict the daily movement of stocks. Domestic and local news could also affect the price movement of stocks.
If you are planning to make money in your free time by investing your hard-earned money in stocks, you need a trading account. You can open a trading account with a reliable stock broker such as Joseph Audia, who has several years of experience offering investment advice.
Buy stocks and hold them for handsome gains
The Stockbrokers tell you to buy stocks of reputed companies at lower rates and hold them for a longer duration for price appreciation. Some people engage in frequent buying and selling of stocks. Such traders miss out on the important fact that annual returns could be higher and offer an opportunity to grow the value of money significantly.
Those who have invested in stocks for a longer duration have earned annualized returns of 9.9% in the 15 years through the year 2017. If you are a short-term investor, you could enjoy just 5% returns. You need to pay a brokerage fee, annual maintenance charges, etc. In the case of short-term trading, the fee could be much higher based on the trading volume. On the other hand, long-term investors need to pay mainly account maintenance charges.
Researched stocks for long-term investment
A reliable and trusted investment advisor provides you with a newsletter with researched stocks for your long-term investment. The research report also tells you the holding period and expected returns over a period. You will also receive alerts from a stock broker about when to sell your holdings and book profits. You may need to pay a small fee to receive timely alerts and research news straight to your email address and Smartphone in the form of SMS for you to quickly act and grab the stocks that expect to rise significantly or sell the stocks that have achieved the target.
Diversification of investments reduces risk
You can diversify your investment in various stocks, bonds, government securities, and mutual funds to ensure stable returns and reduce the risk of losing money. It is a time-tested strategy. You can approach Joseph Audia for investment advice. Those with five or 10 years of service and aiming for savings for a happy retirement can choose bonds, government-backed securities, and treasury funds. It offers guaranteed returns.
You should not put all of your funds in a single stock. You may risk losing all of your money if the company receives negative news or something happens to it. Therefore, a renowned stock broker suggests diversifying your investment for significant growth. Those seeking diversification can choose exchange-traded funds or mutual funds.
Funds will give you exposure to several hundred stocks, bonds, and government securities in a proportionate amount and offer guaranteed returns. You could also expect exponential returns over time by staying invested for a longer period. You can also benefit from dividends paid by companies on their stocks. You can reinvest such dividends to maximize your returns and amass huge wealth.