Yes I said it, I’m Buying Stocks…
Not Bonds…Not Mutual Funds…Not Real Estate…Not Gold…Not Artwork or paintings…Not Wine, (yes, I said wine)…Not Sports memoribila…Stocks.
So why buy stocks first??
Stocks provide one of many ways to invest your hard earned dollar and still diversify. The main reason is that stocks provide the highest potential return over the long term, compared to any other investment…. Period. Certainly while all listed above are great ways to diversify and provide a mixed portfolio, stocks at the end of the day continue to outperform over the long term investing approach.
It’s been said, and many articles provide that stocks average about 10% return per year, bonds 5-8%, real estate 3-6% (after expenses) and down the ladder.
When you buy stock, you indirectly share ownership of that company, thus becoming a shareholder. When the values of that company’s shares go up and down, it gives you the ability to sell and make a profit. Some companies periodically, pay a dividend where they will pay you in additional shares instead of cash payout. You can also exercise Dividend Re-Investment Plans (DRIP) with their dividend reinvestment programs that are available.
Tagsales, Yep they are still here. With dollar cost averaging and buying fixed dollar amounts of stocks at fixed intervals, you are able to average out and buy more shares of stocks when the price is lower and less shares when the price is higher. Using DCA you can continuously find stocks at “tagsales”. Although its been said you cannot time the market, DCA can bail you out even if you think it’s a “sure thing”.
Representing the United States Market, this is how the Dow Jones Industrial Average has performed in the last 107 years (1900 – 2006, Monthly):
Here’s another look at the DJIA in the last 105 years (1900 – 2005):
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