Investing in Stocks for Your Prosperity

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The Beginning of Living on Large Cap Stocks
Like many stock market investors/traders, I too, lost my shirt in the nineties. High-tech stocks always seemed to offer such huge returns, and when you analyzed the charts they looked like can't miss opportunities. But as the decade wore on my stock...



HomelandDefenseStocks.com Reports on Biodefense Stocks Following Recent VaxGen $877.5M Contract
HomelandDefenseStocks.com Reports on Biodefense Stocks Following Recent VaxGen $877.5M Contract POINT ROBERTS, Wash. Nov 08, 2004 - www.HomelandDefenseStocks.com, (HDS), an investor news portal for the Homeland Defense and Security Sector,...

Stock Market Trading .- Small cap & micro stocks go up and down ... How can you benefit ?
Success in small cap & micro cap stock trading like with any other business in life comes from being able to see the big picture and from paying attention to the small details. Let's say for example that you are a business owner and you have a...


Rational Momentum Traders .... Identify Explosive Stocks to Trade ... Day Trader Tips & Tactics
In the stock market it's not unsual to see a stock go up more than 15% in less than 5 minutes on a good momentum day. It could seem that making money in the market is just a matter of buying one of those fast moving stocks and riding them for...

HomelandDefenseStocks.com updates its Homeland Defense Stocks Online Investor Conference: 13 Public Companies Including TASER International, Markland Technologies, Inc., MDM Group, Inc., Navicom Wireless GPS, OnScreen Technology, Inc., Roaming
October 15, 2004 HomelandDefenseStocks.com updates its Homeland Defense Stocks Online Investor Conference: 13 Public Companies Including TASER International, Markland Technologies, Inc., MDM Group, Inc., Navicom Wireless GPS, OnScreen...

How to buy & sell stocks ... Concrete strategies to make money in the stock market
Profitable day traders and investors recognize that picking hot stocks with momentum is among the fastest & most effective ways to harvest BIG piles of cash in the stock market. The problem is that if you don't know what stocks to look for and how...

Investors Chasing Uranium Mining Stocks, Again: A Favorite Emerges
Fifty years ago, uranium fever hit Wall Street. It was then just a few years after a Navajo shepherd in New Mexico, by the name of Paddy Martinez, discovered “yellow rocks” on his property, mistaking them at first for gold. An avalanche of 1950s...

RFIDInvesting.com Updates Online Investor Forum for RFID Stocks and Industry with Participating Analyst on Global Markets and Applications for Radio Frequency Identification
For Immediate Release December 28th 2004 RFIDInvesting.com Updates Online Investor Forum for RFID Stocks and Industry with Participating Analyst on Global Markets and Applications for Radio Frequency Identification POINT ROBERTS, WA....

Stock Market Trading ... Using stock charts, stock prices & stock quotes ... Trade Explosive Stocks ... Day Trading Breakout Rally
Stock Market Trading ... Using stock charts, stock prices & stock quotes ... Trade Explosive Stocks ... Day Trading Breakout Rally .- Most stock traders recognize that momentum trading can be a very profitable activity. You can make big amounts...

 
Why Invest In Stocks?

Have you ever wondered why investors behave the way they do? For example, why do people invest in bonds or stocks or not at all? Since I am an advocate of stock investing, let me make the case for stock investing.

So, why invest in stocks? No, I won't just invest in any kind of stocks. There are goals associated with investing in stocks. For starter, stock investors would want to be compensated more than if they put their money in the bank. Anything else? Yes. Stock investors would want to be compensated more than the risk free interest rate which currently yield around 4.7%. For your information, risk free interest rate here is the 10 year Treasury bond which is backed by the United States Government. These bonds are deemed to be free from the risk of default.

Therefore, when we invest in stocks, we would want a return in excess of 4.7%. How much more? That varies within individuals. Some wants a 5% return. Others are satisfied with 6% return. Personally, I would want at least 7% return for my stock investment. There are reasons for this. Stock


investing is relatively volatile and full of uncertainty. Interest rate goes up and down which will hamper our return as stock investors. For example if interest rate rises to 8%, would aiming a 7% return for your stock investment worth the risk? Probably not. In this case, most people prefer to put their money in the bank and enjoy the higher return.

Having said that, we need to know how much stocks have given investors historically. For the US stock market, the return for the last century has been in the neighborhood of 10%. That, my friend, is the sole reason to invest in stocks. Not because you want to own a piece of corporate America. You invest in stocks because historically it gives you a better return that other investing alternatives. No other investments boast that high of a return over the last century, not even real estate.

About The Author

Hari Wibowo

Get your free investing idea by visiting our commentary section at http://www.noviceinvesting.com.

 


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