Your Questions About Advantages And Disadvantages Of Investing In Stocks

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John asks…

What are the advantages and disadvantages of investing in Common Stocks?

any help would be appreciated

financi4 answers:

Advantages are obviously a higher rate of return than most other investments, you can invest in stocks with very little money not like real estate, some tax benefits like long term gains taxes are lower than income taxes, very liquid investment, if you want to sell it you can, you can pick the next microsoft and make a ton of money

disadvantages/,higher risk than savings account etc, maybe the stock is down when you have to pull money out, can be transaction fees, ,you can pick a loser and lose it all,im sure there are more

just invest in mutual funds though, dont bother trying to pick your own stock

Richard asks…

What are some advantages and disadvantages of investing in a stock market?

It’s for a school project.

Some advantages and disadvantages of investing in a stock market.

Thank you 😛

financi4 answers:

Advantages: You could make tons of money
Disadvantages: You could lose all your money.

Alright, well the advantages are that in the long run the stock market goes up. If you buy all the stocks listed on the DOW, you will make a profit in the very long run almost without a doubt. There is also the chance that you can be good at picking stocks and at timing when you buy the stocks, and make a lot of money very fast.

But the disadvantage is the risk. You will not be able to buy every stock and you won’t be able to hold on to stocks long enough to definitely make money. You may need the cash before the market goes up. You also may be bad at picking stocks and be bad at timing when you buy the stocks. There is a large risk involved.

The alternative would be putting your money in something safer where you will make less money, but won’t have the risk. This would be something like a savings account or a CD or bonds or anything like that.

David asks…

What are the advantages/disadvantages of investing in a stock while its at .0001?

It seems like a great way to profit/double your money… If it’s hit .0001 a few times and goes up it doesnt look like it will go bankrupt.

financi4 answers:

Just because the chart goes from .0001 to .0002 doesn’t mean you actually could have sold your shares. There are probably lots of people trying to sell, and almost nobody buying. That 100% movement on the chart could represent the sale of only a few shares, which of course doesn’t amount to any money.

A penny stock, especially one trading below a penny, is like a hot potato. Everyone wants to get rid of it. Yes, you could get lucky, but even then, you probably wouldn’t make a fortune.

Steven asks…

i’d like to know about advantages and disadvantages of investing money in houses, buildings or stock exchange ?


financi4 answers:

Stocks are much more liquid than real estate.
Stocks can be purchased for much less than real estate, making it easier to diversify.
The trading expenses are much lower for stocks.
You do not have to deal with zoning laws or property taxes with stocks.

You can improve the value of real estate with “sweat equity” if you want to.
You can usually get more leverage with real estate.

Michael asks…

What are the advantages and isadvantages of investing in a growth or income stock?

I have to write an essay for my Personal Finance class. I am writting about McDonald and Burger King. For one of my paragraphs I have to Comparew and Contrast the companies’ stocks by explaining the advantages and disadvanteges of investing in a growth or income stock. I have no clue what a growth or income stock is or their advantages or disadvantages are. I can’t find anything on the internet about it. So can you please answer my question and if possible write a website that I can site that I got my answer from.

financi4 answers:

Growth stocks are a bit of a swindle. The expectation is that the corporations you are interested in will continue to do well for the foreseeable future, so it becomes worth more, so its shares become more valuable. They do not pay dividends, unless something extraordinary happens.

Income stocks aren’t intended to appreciate in value like growth stocks. Instead, they will occasionally or periodically have dividends paid to the share owners from a portion of the corporation’s earnings. The price-earnings ratio of a stock helps you determine if the size of the regular dividends (sometimes there are extras, and sometimes dividends are not paid) compared to the current value of the stock on the open market makes it a tempting buy.

Common stocks have voting rights.
Preferred stocks will pay their dividends before common stocks will, but they typically have no voting rights.

Growth stocks: Big time gamble / speculation
Income stocks: Lesser gamble, but no stock investment is guaranteed by any government agency and may lose value or even become worthless.

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