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Saturday, April 11, 2009

Basics of Stocks PartII: What does Investing on Stocks mean?

By Mara Hernandez-Capili

Stocks are another form of investment that can make your money work for you or in other words, your money can grow in itself without you practically doing anything. More and more people are including stock trading on their investment portfolio along with their acquired assets. This article is written to provide you with the basics of investing on stocks.

What does investing on stocks mean and how is it different from investing your money in the bank? Investing on stocks is when you buy a share from a publicly listed company. This action will make you part-owner of that company and enjoy exclusive privileges such as voting rights. Your money will increase in percentage as the company enjoys higher profits at a given time. However, you may also lose a certain percentage or your money may have the possibility of not earning anything if the company suffers losses.

Investing on stocks is different from investing your cash at the bank because of several things, first is because: banks have taxes payment and little annual percentage returns and is affected by the market inflation. The argument is always on this presentation: banks to maximum security but lower to no returns, stocks to greater risks but higher percentage returns. There is little to no risk of losing your money that is invested in a bank.

Investing in stocks follow the simple rule that the more money you invest the higher the risks you may experience, that is why a lot of people are thinking twice on this kind of investment. If youre a beginner and would like to try your hand at stocks, it is advisable for you to start investing with an amount you are most comfortable in losing (if ever it happens).

Whether you have plans on investing in stocks now is the right time to do so when you are still young and have a lot of time to recover in case you lost. - 23208

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