Investing principles for building wealth – Sify.com
Investing principles for building wealth – Sify.com: “Investing principles for building wealth
By Kathy Kristof |
Stocks are volatile, which is another way of saying they’re likely to experience wide swings in value. However, over long periods of time, there’s good reason to believe stocks also will appreciate dramatically faster than any other type of asset. That makes it easier to attain your long-term wealth goals.
When you buy a share of stock, you are buying a piece of the issuing company. Admittedly, it’s probably a small piece, but that share you purchased gives you the right to participate in the company’s wealth (or fiscal decline) and vote on matters of some importance—directors, company auditors, and some shifts in corporate policy.
In some cases, you are also entitled to dividends—payments of cash or stock to shareholders. Some companies also provide their shareholders with perquisites, such as tickets to the company’s theme parks or discounts on its merchandise.
Because companies tend to grow and prosper over time—and because a share of stock allows you to participate in the prosperity—stock prices, in the aggregate, tend to appreciate over long periods of time. However, individually, some companies prosper; others fail. If you buy a share in a loser, you could lose all, or a significant portion, of your “
