Rabu, 27 Januari 2010

Start Investing in the Stock Market

Start Investing in the Stock Market

Many of my friends have started earning money. They are right now in the first phase of their earning life means good earning without any liabilities and dependents. They ask me that, What should be the first step for the Financial Freedom?

Well, my answer is – Start Investing in the Stock Market

If you have just started earning than your first step towards financial freedom should be this. Now the question is that, Why to invest in stocks? Well, this is very simple. Because Equity (Stocks) is the only asset class which has given highest returns in the long run than any other asset class and beaten the inflation.

No other Asset class in the world has given as high returns as Equity. In the USA, in past 30 years the Equity has given 11% annual return in the long run. And that is much more than US Treasury bonds and the returns from your savings account or fixed deposits in the bank which hardly give you 3-5% annual return.

And that’s why everyone should start investing in the stock market from the first day of their active learning life. Remember, you should stay invested for the long term. Long term means more than 5 years of span. In the longer run, the risk from equity becomes almost zero and the chances of huge capital gains are very high. This is because of the power of the compound interest.

The more time you stay invested in the stock market (Or in any other Asset class), the compound interest will work more in favour of you and make you rich and financially free. So if you haven’t started investing in the stock market than start investing in the stock market today.

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