Investing in the share market can be a great way to grow your wealth over time. Historically, the share market has provided higher returns than other asset classes such as cash or fixed income investments. However, investing in the share market always carries some risk, so it’s important to do your research and understand the risks before investing.
4 reasons why you should consider investing!
Some reasons why you might consider investing in the share market include:
- Potential for higher returns: As mentioned earlier, the share market has historically provided higher returns than other asset classes such as cash or fixed income investments.
- Diversification: Investing in the share market can help you diversify your portfolio and reduce your risk. By investing in a range of different shares across different industries and sectors, you can spread your risk and protect your investments.
- Inflation protection: Investing in the share market can help protect your investments against inflation. Over the long-term, shares have generally provided returns that are higher than the rate of inflation.
- Dividend income: Many companies pay dividends to their shareholders, which can provide a steady stream of income. This can be particularly attractive for investors who are looking for regular income in retirement.
5 ways to invest in the share market.
- Buy stocks with a broker: You can invest in stocks directly through a stockbroker or trading platform. This is a good option if you want to invest in specific companies and have more control over your investments.
- Invest in ETFs: By purchasing units in an exchange-traded fund, you can invest in a whole stock portfolio. This can be a good way to diversify your investments and reduce your risk.
- Invest in managed funds: Managed funds are similar to ETFs in that they are investment funds that pool money from multiple investors to buy a diversified portfolio of stocks. However, managed funds are not traded on the stock exchange and are instead bought and sold through a fund manager.
- Participate in a dividend reinvestment plan (DRP): DRPs allow you to reinvest your dividends back into the company’s stock, rather than receiving them as cash. This can be a good way to build your investment over time.
- Use a robo-advisor: Robo-advisors are automated investment platforms that use algorithms to create and manage your investment portfolio. This can be a good option if you’re new to investing and want a more hands-off approach.
Once again remember, investing in the share market always carries some risk, so it’s important to do your research and seek professional advice if you’re unsure about anything. Good luck.