Forum

Careful Consideration
o The thinking involved before making a decision to invest in stocks includes how to actually do it and in what stocks to invest. First someone has to decide whether he is willing to take on some risk and place his money on a stock that he hopes will increase in value.
o Why Do It!
o Investing in the stock market has one overriding goal: to make money. A typical reason why people will choose to invest in stocks rather than other avenues can be because she likes a specific industry or company. Maybe a company has come up with a new product with potential to revolutionize communications, or possibly new techniques that were developed by a company in the banking field. In other cases she may want to invest in a stable blue chip company with a good track record and is looking for a slow, long-term gain over a period of years, to perhaps enhance her retirement fund or pay for college tuition. In other cases, she may take a bigger risk and invest in smaller penny stock companies that she expects will do well in the near future. Excitement and thrill are factors as well, with anticipation of hitting it big by owning a piece of a company she likes and having the opportunity to flourish with it.
Stock Market Versus Other Investments
o Stocks provide but one avenue of investing. There are corporate and government bonds available, which are considered less risky than stocks but typically offer smaller returns, that are commonly found in portfolios. Investing in commodities such as gold or silver is yet another avenue, as is real estate, while some choose to invest in themselves through self-employment. Many investors have a diversified portfolio as a protection, so that if one form of investment takes a downward turn, there is still opportunity that the other instruments will be doing well and dampen the loss. Stocks are considered to be one of the most risky investments but also offer a chance to reap large rewards as the continuation of this opportunity remains prevalent.