You have a lot of choices when it comes to your money. You could buy something fun like a flat-screen TV or a boat, you could remodel your house or you could even take that dream vacation around the world you’ve been dreaming of. On the other hand, if you wanted to be a little more practical, you could put your money to work for you and invest it in the stock market.
Let’s face it. Spending your money is a lot more fun than saving your money. So why is it that you are here learning how to save and invest your money instead of out somewhere spending your money? The answer: benefits.
Investing in the stock market provides many benefits to individual investors. While this list is by no means exhaustive, we will be discussing the following benefits:
– Compound Interest
– Time Value of Money
– Tax Deferral
Compound Interest is a miracle of the financial world. Compound interest, when given time, helps your money grow faster and faster.
Time Value of Money
The Time Value of Money is a simple concept. Basically, it means that the more time you give your money to work for you, the more your money will make for you.
Tax Deferral is the greatest investing benefit the U.S. government has given to individual investors. The ability to delay paying taxes on your money can virtually double your investment power.
Diversification enables you to spread out your risk so you don’t have to put all of your hopes and dreams behind the success of a single investment.
This article is produced by Learning Markets, LLC. The materials presented are being provided to you for educational purposes only. The content was created and is being presented by employees or representatives of Learning Markets, LLC. The information presented or discussed is not a recommendation or an offer of, or solicitation of an offer by Learning Markets or its affiliates to buy, sell or hold any security or other financial product or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances and your investment objectives. Learning Markets and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.
Any specific securities, or types of securities, used as examples are for demonstration purposes only. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security.
Investors should consider the investment objectives, charges, expense, and unique risk profile of an Exchange Traded Fund (ETF) carefully before investing. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. These funds’ performance will likely be significantly different than their benchmark over periods of more than one day, and their performance over time may in fact trend opposite of their benchmark. Investors should monitor these holdings, consistent with their strategies, as frequently as daily. A prospectus contains this and other information about the ETF and should be obtained from the issuer. The prospectus should be read carefully before investing.
Investors should consider the investment objectives, risks, charges, and expenses of mutual fund carefully before investing. Mutual funds are subject to market fluctuation including the potential for loss of principal. A prospectus contains this and other information about the fund and is available from the issuer. The prospectus should be read carefully before investing.
Options involve risk and are not suitable for all investors. Detailed information on the risks associated with options can be found by downloading the Characteristics and Risks of Standardized Options and Supplements (PDF) from The Options Clearing Corporation, or by calling the Options Clearing Corporation at 1-888-OPTIONS.