Trading for Your Future: 3 Reasons the Stock Market is a Useful Tool

Those who have money to invest are constantly bombarded with an avalanche of investment options to choose from. For most investment savvy people, opting to put such money into some form or stock trade is often a no brainer. Why, you wonder? Despite the occasional ups and downs in the stock market, stocks have historically had the highest average annual returns compared to other popular investment classes.

Whether you look at it from the standpoint of a businesses seeking to raise capital or investor seeking to make some cash by trading on stocks, the stock market is important in innumerable ways. We examine three in this writeup.

A tool for financial planning

From the diverse mix of individual stocks to exchange-traded funds (ETFs) and mutual funds, every form of stock in the market is central to long term financial planning.

Financial planning is simply the systematic approach that involves utilizing financial tools to maximize your existing financial resources so you can achieve your financial goals.

Ideally the ultimate long term financial goal for everyone is to secure their retirement. You want to have some money to live off when you’re old and can no longer work to earn a salary.

While this, for many people, means saving as much money as possible, smarter folks create ways to make the “saved” money grow. It is even much better if the money keeps growing long after your retirement – which is precisely what investing in some form of stock does for you: puts your money on a constant growth trajectory.

Whether you hold stocks directly online in your brokerage accounts or indirectly in mutual funds, buy the volatile growth stocks or invest in the less volatile utility stocks; one thing remains unchanged: the stock market will keep rising in value and only become greater over time despite the constant rising and falling in prices of individual stocks. This makes the stock market one of the most powerful tools available for long term financial planning.

Source of quick returns

It’s the nature of any business to take a while before you can start seeing any solid returns. Stock trading is different.

Unlike most businesses where you can take even years before you start seeing good revenue, the returns for stock trading can be instant, not to mention that there is no advertising your offering or any such hassles in the stock market. With a good strategy and proper knowledge of the trends in stock market, you can make money in minutes.

A platform for everyone

There are no minimum requirements for trading in stock. Platforms like allow you to buy and sell stock of your own choosing online even if you have no formal education or business experience. All you have to do is collect as much information as you can about the various stock options available and select your preference. Then you can trade and make money any time of day in this 24-hour market.

Last words

Whether you choose to work part time or full time, you stand to feel the inherent value of the stock market. Its completely upon you to make the most of it.

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