A Simple Plan: Finance

Advantages of Buying Stocks

An individual ownership in a company or a corporation is termed as stocks. Sine an individual does participate in the growth of the company through stocks, one is therefore entitled to the earnings and the asset that a company or corporation receives. There are various advantages that an individual can earn from purchasing the stocks of a company.

Firstly, it is important to note that as the economy gradually grows then this means that the earnings ones get from the stocks increases. This is because profit of the company therefore increases due to the cash inflow that is brought by the growth of the company. The process of being a stock holder is simple since one can easily buy from the company’s online platform or better yet buy from a broker.

It is a fact that from the other classes of assets, stocks are known to have the highest returns. An individual is therefore guaranteed of having hefty earnings by buying the stocks of a company or a corporation. Stocks are also considered to be very diverse given by the fact that one can easily invest in different sectors of the economy as well as different countries. The diversity of the stocks enables an individual to have a wide range of growing opportunities since they are not confined to just buying stocks from the same country or worse yet from just one industry. The reason why individual invests on stocks in their need for money, given they want to use the money earned from the stocks they can do it. Given by the fact that stocks can be easily liquidated and can be turned to cash really quick then the urgency of money can be easily solved.

Moreover, an individual who is a stock holder is able to earn much profit given that they decide to sell their profits. One is able to attain the profit given by the fact that they have a right to sell their prices at whatever cost, one is therefore not committing a crime by deciding to sell the stock at a higher prices that they bought with. Additionally, an individual based on the stocks they have can be able to get an employment opportunity at the company in which they have shares with. In most if not all the companies, the directors are appointed according to the amount of stocks an individual has with the company, hence if an individual has a good amount of stock then they can vie for the position. An individual therefore has the opportunity to apply for a director position if they have the amount of stocks that the company has stated one can be able to get the job.

In summary, stocks are characterized with limited liability. For its limited liability nature, an individual is saved from suffering a loss given that the company suffers a close down.

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