The economic world is changing and the global recession is one of its most apparent symptoms. People all over the world are experiencing different things with some unemployed people finding their dream jobs while a lot of others suddenly find themselves jobless and looking for a means to support themselves. The prices of various products fluctuate almost erratically and some essential products can be suddenly available at low prices while others skyrocket beyond the reach of your average buyer. With the way things are going in the economy, people all over the world are beginning to ask questions.
- What’s happening to our money?
- Why are good jobs so elusive?
- Why are the prices of goods so high?
- Where can I get a job with reasonable pay?
- Where is all our money going?
While the answers and explanations are numerous, it all boils down to the changing economy. As prices rise and fall continually, you find yourself spending more and more money just to keep up with the troubles of the times. Jobs become elusive because companies have trouble keeping up with the times as well and sometimes need to cut back on employees. What jobs are available tend to be inconvenient or simply aren’t paying enough to make do with.
That’s why people of today have come up with a lot of ideas on how to keep up with the troubled times. Some have tried to support several jobs and renting a house instead of just owning one. Some go as far as to shelter up in their homes acting like the world is somehow ending or has already ended. But then there are those who try to make the right decision and decide to buy up on stock instead and somehow make things work.
So why should you start investing in stocks and how much should you invest?
Definition of Stocks
Well, first let’s define what stocks are. Stocks are actually a kind of equity for a given company. They represent the assets of a company and are always regarded highly. Companies have been known to rise or fall with the stocks they possess.
History of Stocks
The idea and use of stock began as early as the 1200s when formal companies began to divide their ownership of things and began to make agreements over products. There is also evidence that the idea of leasing shares went back as far as the Roman Era when the Republic sought to trade with various parties whose wares they needed.
Types of Stocks
There are actually two kinds of stock and companies attach a considerable value both. Nonetheless, being the capital available to a company, it’s really no surprise that both forms of stock are sought after by many individuals.
- Common Stock: As the name implies, this is the most numerous stock out there. While it may not seem much, it can eventually overshadow preferred stock if given enough time.
- Preferred Stock: Preferred stock, again going by its name, is stock that is usually valued over common stock. However, unlike common stock, preferred stock can lose its value over time and not as advantageous as common stock.
Is it really necessary to buy stocks in this day and age?
The answer to that is yes. The world’s economic situation isn’t exactly at it’s best right now and having something to hold on to financially is probably your best bet for times to come. With the way the prices of various products seem to change on a regular basis, wouldn’t it be best to have something to hold on to in these economically turbulent times?
- Advantages of buying stock: As mentioned, having stocks can be advantageous as they provide a measure of financial security to those who purchase them. As they allow you to participate in a company’s growth, you will have some grasp of assets so long as you have them.
- Disadvantages of buying stock: Buying stock can have disadvantages as well. Like all things in the global market today, even stocks fluctuate as well. This fluctuation may even lead to them having reduced value which may not be what you have in mind when you first decided to buy them.
Knowing How Much Money Is Safe To Invest In Stocks
So let’s get down to it now. Just how much do you really want to put into stocks in order for to have some degree of financial security?
Well, here’s a breakdown on the size of the investments you can make:
- $50: Perhaps the most basic size of an investment. It’s not exactly much but remember, with just this much, you probably won’t have to worry so much even if the prices of various goods and the value of stocks somehow crash. However, considering the fact that you only spent $50, don’t really expect too much out of this kind of deal.
- $1000-$5000: Now this is more like it. With up to 1000 to 5000 dollars in the pot, it’s likely that you’ll get just about as much in this deal. This is probably the best amount to invest, as you’re likely to get more out of this deal than just spending $50, and even if things don’t go too well, you don’t have to take things too hard.
- $10,000 and above: By far the largest investment you can make when it comes to stocks and will probably present the best outcome should things turn out your way. Unfortunately, if they don’t turn out your way, things might get a little difficult as you’ve spent a considerable amount of money and may not be able to regain something of equal value.
When making investments in stocks, it may also be a good idea to consider the time and how the situation in the global market. That way, you’ll have some idea as to what you’re actually getting yourself into. Also note how long you’ll be making your investments so that you can prepare yourself for changes when they happen.