Why Invest in Stocks?

Simply put, of all the possible types of investments, stocks will provide the best opportunity for growth over time and are a great solution for long-term investing. This idea is the core approach of many investors today. I say this because I am a firm believer in the growth and wealth generating power of stocks as you will find to be true.

Stocks define the fundamentals of investing and define a position with absolute belief of which you will find that you have to understand the power of stocks if your are to benefit from investing yourself. You as an investor must understand this approach and must be prepared with confidence because when you're confidence is low, you'll find yourself in a panic and tempted to run at the slightest downturn in the market.

Keep this is mind: Over the course of years, stocks have consistently outperformed all other types of investments including government securities, bonds, and CDs. Jeremy Siegel, who is a professor of finance at the Wharton School, researched stock market returns over a period of 100 years ( 1802 - 1997) and in his findings he found in total returns, stocks outperformed all other types of investments. "One dollar invested and reinvested in stocks since 1802 would have accumulated to $7,470,000 by the end of 1997."Jeremy talks about this in his book- Stocks for the Long Run : The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies. Of course this is a rather long period of time, however, the power of stocks is certainly noted.

You, as an investor, can see that the long term trend of stocks is an upward trend and has always been. There have been ups and downs, of course. But trailing right after the downs are the ups with a pretty stable track record.

Now that you know the power of stocks, you may ask yourself how have stocks outperformed all other types of investments? How will you know if the trend will continue? Well it turns out that history is a relevant factor. But why have stocks outperformed all other investments?

There is defiantly no magic and zero trickery. Simply put it's not even as mysterious as why the sun rises every morning. There is most certainly a reason for the upward trend that U.S. markets have experienced over the last 100 years. It's what distinguishes stocks from all other types of investments. It's the reason why stocks are such a solid investment. It's growth.


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Other Resources
Jim Cramer's Mad Money: Watch TV, Get Rich
The Little Book That Beats the Market
Street Smarts: High Probability Short-Term Trading Strategies