Many are lured in by the potential to earn big money. Though, the truth is that putting your money in the stock market is dangerous unless you really know what you’re doing.
Why Is The Stock Market Considered Profitable For Investment?
First of all, look at it from a company owner’s point of view. Companies are listed on the stock market because they believe they can sell shares of the company to investors. Investors can be anybody who has sufficient cash to buy a certain number of shares.
This kind of investment relationship also means that the investor has to be paid to use their equity. Thus, after a profitable business period, the company owner has to pay a certain percentage of the investors’ profits.
Another way you could profit in the stock market is through ‘capital gains.’ This means that the shares you invested money to acquire may become more valuable through time because other people observed that the company seems to be doing very well.
- You need to know why you picked a particular company. - You need to be sure how much money you intend to reap from your investment. - You need to know the language of the stock market. - You need to check how much time you’ll hold on to your shares.