There are plenty of ways of how to grow your investment portfolio and just among them is through stocks. Owning stocks from various companies could literally help in building your savings, make the most of your investments and protect your money from taxes and inflation. Stocks are so good that even owners of different businesses like dental debt collection agency and more are buying stocks from other companies.

On the other hand, just before jumping into stock market investing, it is essential to be mindful of the associated risks. Because like any other investments, it helps a lot to be aware of the risks and of course, your tolerance for risk.

Advantages of Stocks Investments

Assuming that you’ve done your research and that the risks are something you can bear on, there are many good reasons to invest in stocks. Feeling skeptical about it, then check out the following:

Number 1. Build Your Wealth

Returns of long-term equity have always been better compared to returns from fixed-income or cash investments similar to bonds. On the other hand, stock prices have the tendency to rise and fall depending on market situation.

Investors are considering long-term perspective in relation to their equity portfolio for the fluctuations in stock market tend to smoothen out in the long run.

Number 2. Protect Your Finances

Let us face the truth, no matter how rich you are, your wealth will be impacted by inflation and taxes. With equity investments, it provides investors with better tax treatment in the long run. This helps in preventing or slowing the negative impacts of both inflation and taxes.

Number 3. Maximize

There are companies that are paying their shareholders dividends or a special distribution. These payments could offer you with regular investment income and at the same time, boost your returns.

On the other hand, you have to be mindful as well that different stocks in the market will be offering different benefits as well.

There are two major kinds of equity investments and each of it offers unique benefits to investors. One would be the “Common Shares”, in which as the name suggests, the most common kind of equity investment. It offers great capital growth, voting privileges, dividend income and liquidity. The second one is called “Preferred Shares”. Preferred shares are ideal among investors who are seeking to build a stream of reliable income and to experience consistent growth at the same time.