Though the stock market is hovering at all-time highs, only about half of all American’s are currently invested. Why? Skepticism from the recession remains and there is a general lack of awareness of how to get started. The good thing is it’s never too late to start investing and here are five reasons why you should start sooner rather than later.
  1. 1. The stock market doesn’t discriminate. Anyone can invest in the stock market. Honestly, anyone. With some money to invest and a basic understanding of how the stock market works, you could be on your way to successfully earning profits and growing your investment.
  2. 2. Your investment is poised to grow. Compound interest is one of the most powerful wealth creations vehicles of all time, but you have to give it time to work its magic. The longer you are invested, the more powerful compounding becomes.
  3. 3. Stocks earn money annually. In addition to long term growth, stocks act as a source of income. Shareholders earn capital gains from a rise in the stock’s price, and dividends, which companies distribute to based on earnings. If you choose to invest in bonds, they will earn interest, usually annually.
  4. 4. You don’t have to pick individual stocks. If you don’t feel confident enough to pick individual stocks, you can invest in an index fund that tracks the whole stock market. This kind of passive investing is far less risky than individual securities and doesn’t require any lengthy research or interest in a businesses operations.
  5. 5. Not investing is a risk. By not investing, your money is not earning any interest and your wealth isn’t growing. Despite the daily fluctuations of the stock market, a strong portfolio will multiply your original investment over time. Investing can help you save for retirement, a home, and any other financial goals you have.