Monday, 26/2/2018 | 3:47 UTC+0

News For This Month: Trading

Advantages of Buying Stocks

A term that defines the ownership of an individual in a company or a corporation is known as stocks. The stock therefore entitles ones to claim any assets and earnings that a company has since they participate in the growth of the company. An individual can therefore benefit from the stocks that they buy from a corporation.

First and foremost, the growth in the economy significantly means that there is an increase in the profit earnings of the stock. This is because profit of the company therefore increases due to the cash inflow that is brought by the growth of the company. Buying stocks from company is not a tedious process given the fact there are a number of stock brokers who facilitate the buying and selling of stocks and furthermore one can buy from the company’s website.

It is a fact that from the other classes of assets, stocks are known to have the highest returns. Majorly because stocks have high returns, an individual therefore enjoys from the high earnings they will have from the company. Stocks are also considered to be very diverse given by the fact that one can easily invest in different sectors of the economy as well as different countries. This therefore gives one the advantage of having various growth opportunities depending on the number of stocks that they decide to invest on. The reason why individual invests on stocks in their need for money, given they want to use the money earned from the stocks they can do it. This issue can be easily worked on given by the fact that stocks can be easily liquidated and therefore stocks can be easily converted to cash.

Given that an individual makes a decision to sell their stocks, then they are guaranteed to make a profit from that. This is given by the fact that a stock holder has the right to sell their stock at a higher price than they originally bought at. Consequently, one is able to land a job opportunity in the company that they have shares with. In most if not all the companies, the directors are appointed according to the amount of stocks an individual has with the company, hence if an individual has a good amount of stock then they can vie for the position. One therefore has an upper hand of applying for the director slot if they qualify for the position based on the stock they hold in the company.

In summary, stocks are characterized with limited liability. For its limited liability nature, an individual is saved from suffering a loss given that the company suffers a close down.

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