What are stocks?

by Jonathan Adams

Stocks are a great category of financial instruments and one of the greatest tools ever for creating wealth. These can be employed by anybody for building wealth, albeit with knowledge, experience and risk taking ability. Stocks are a part, if not all, of almost any investment portfolio. When you begin your journey to financial freedom, you need to have a sound and solid understanding of stocks and how they trade on the stock market.

Over the last few decades, the interest of the average person in the stock market has seen incredible growth. What was once a toy of the rich; is now the tool for success for all, if used cautiously. It has now turned into the vehicle of choice for people keen on growing wealth. Together with advances in technology in trade the demand for stocks has opened up a host of opportunities for the man on the street and nearly anybody can own stocks.

But despite their immense popularity, most people are not clear about the concept of stocks and don’t fully understand them. Much is learned from conversations in cafeterias and those discussing are naïve as others in the discussion and have no idea what they are talking about.

There is plenty of misinformation and speculations around fuelled by the desire to get rich quick, which was the trend during the amazing dotcom boom in the late ’90s. People believed stocks to be the magic answer to instant wealth with no risk but the crash of the dotcom boom disproved the case.

Though, stocks can and actually do create massive wealth, they aren’t without risks. The only solution to this is awareness, knowledge, education and experience. The key to success in the stock market is to know where your money is going to stay in the stock market.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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