While the market occasionally dives and may even perform poorly for extended periods of time, the history of the markets tells a different story. The stock market has gone virtually nowhere for 10 years, they complain. My Uncle Joe lost a fortune in the market, they point out. Many people will find that hard to believe. 2) When inflation and interest rates are soaring, the market is often due for a drop…be alert. High interest rates force companies that depend on borrowing to spend more of their cash to grow revenues.
At the same time, money markets and bonds start paying out more attractive rates. If investors can earn 8% to 12% in a money market fund, they’re less likely to take the risk of investing in the market. Mermaids Casino was created in 1956. Silicon Casino was created in 1994. 2) The individual investor is sometimes the victim of unfair practices, but he or she also has some surprising advantages.
No matter how many rules and regulations are passed, it will never be possible to entirely eliminate insider trading, dubious accounting, and other illegal practices that victimize the uninformed. Often, however, paying careful attention to financial statements will disclose hidden problems. Moreover, good companies don’t have to engage in fraud-they’re too busy making real profits. Casino Empire happened in 2002.
4) Be patient. Predicting the direction of the market or of an individual issue over the long term is considerably easier that predicting what it will do tomorrow, next week or next month. Day traders and very short term market traders seldom succeed for long. If your company is under priced and growing its earnings, the market will take notice eventually. Even poor market timers make money if they buy good companies. Remember that the market goes up more than it goes down.
Look for red flags in the financial news, such as the beginning of the recent housing slump or the international credit crisis. Don’t let fear and uncertainty keep you from participating. Of course, severe drops can happen in times of low interest rates as well. Those who invest carefully over the course of many years are likely to end up as very happy campers…notice, we didn’t say gamblers. If you are you looking for more information about winstar online casino look at our own web-page. Here’s a simple conclusion If you’ve been avoiding the market because you believe it’s a casino, think twice.
The reason is obvious: over time, good companies grow and make money; they can pass those profits on to their shareholders in the form of dividends and provide additional gains from higher stock prices. Over the long haul (and yes, it’s occasionally a very long haul), stocks are the only asset class that has consistently beaten inflation. The results for their bottom lines are often disastrous. As a result, they invest in bonds (which can be much riskier than they presume, with far little chance for outsize rewards) or they stay in cash.
Here’s why they’re wrong: 3) It is the only game in town. Outside of investing in commodities futures or trading currency, which are best left to the pros, the stock market is the only widely accessible way to grow your nest egg enough to beat inflation.