Everybody dreams of having a comfortable life and future. To achieve this, it is paramount to start investing. Most folks choose to invest through brokerages, which is great provided you stick to firms backed by a strong reputation. However, you can also act as your own brokerage by handling all of your investments yourself. How does investing help? With investing, you earn an income from an alternative source, a way to fund yourself for retirement, and even be a source for emergency funds.
In the end, your wealth will be able to grow as well as you being able to achieve your goals of financial independence and being able to purchase anything that your heart desires. Alternatively, let’s say that you came into an inheritance or sold a piece of real estate. The money you receive from these can easily grow in your favor in a short amount of time.
No matter how you invest, whether it’s in general terms or finding the best airline stocks, you need to start by being familiar with a few of the best that are currently available below.
Stocks That Pay Dividends
Having a feeling of investment safety can go a long way when your stocks pay a nice dividend, especially when it’s per share. The amount of a dividend depends solely on a company’s amount of profit, which then a determined percentage gets distributed to the shareholders every quarter. When you have dividend stocks, you are able to earn two ways. First, you’ll earn through appreciation in the market. Second, you’ll earn short-term cash.
Keep in mind that no matter which type of stock you wish to invest in (no dividend or dividend-paying) you need to ensure that you know what you’re getting yourself into first.
Involved Risk: Just like all of the other stocks on the market, dividend stocks are not exempt from risk. Although they have a safer outlook compared to non-dividend paying stocks, you should still use caution as you add them to your portfolio. Your best bet will be dividend stocks that continue to show an increase in dividend payout.
High Liquidity: Being liquid allows you to sell or buy dividend stocks during market hours. It is recommended that in order to achieve good performance with your dividend stock, then you should invest in the long-term as well as reinvesting all earned dividends.
Investing in Growth Stocks
Over time, we’ve seen growth stocks continue to perform beyond expectation. The main reason why is because the stocks are generally those of technology companies who have a constant rate of both sales and the profits those sales generate. Such is the case of Apple, Amazon, and Alphabet. Growth stocks like these are not known for distributing dividends, but rather reinvesting them to keep growing.
Growth stocks are not only one of the most popular investment types, but they will continue to be and for good reason—their rate of return. It’s a fact that the best growth stock is able to give a minimum of twenty percent in return over the course of years. Regardless, you need to personally review them in order to determine which stocks will return long-term gains.
With growth stocks, they are a better option for investors who already have a high amount of experience with them due to the volatility of the stock as well as analyzing them in a way that they’ll be able to profit from them.
Involved Risk: Being a successful stock market stock can have its share of drawbacks, mainly volatility. This is a huge risk with growth stocks because if the market suddenly spirals down, then your growth stock will follow suit but at a much higher rate. This can cause a financial nightmare for investors. When this happens, you are literally losing money from it due to their volatility.
High Liquidity: Growth stocks are no different from any other exchange stock. They have high liquidity which allows you to purchase them every day during the open hours of the stock market.
Investing in Growth Stock Funds
If you are an investor who doesn’t like to do all of the hard work that owning individual stocks involve, then investing in a fund made up of several stocks will be the best way for you.
Having a growth-stock fund as a beginner is a great way to start diversifying your investment portfolio. Owning a growth-stock fund gives you the advantage of having it managed by a fund manager who selects the stocks that the fund will be made up of, or they can select funds that are managed passively by having growth-stocks pre-selected for the fund.
No matter how you look at it, the fund lets the investor receive access to many growth stocks that are diversified. This reduces risk from individual stocks that may be depreciating and affecting the portfolio negatively. The end result of a growth-stock fund is determined by its performance average of the fund’s stocks. This could turn out to be a great investment over time.
Involved Risk: When you invest in growth-stock funds, you are eliminating any risk as compared to owning growth stocks individually. Having a growth stock fund allows you to enjoy the growth without having to do all of the associated work of maintaining it.
High Liquidity: The growth-stock fund and the stocks that they invest in also have a high amount of liquidity. This liquidity allows investors to move around within the fund on open market days.