The biggest plus of investing in the stock market is not guaranteed but holds investors in awe: making a tremendous amount of money. You don’t need to invest a lot to get started, either. You can start with some shares of an index exchange-traded fund (ETF) and slowly increase the size of the investments over time. Another option in today’s stock market is to buy fractions of shares, which cost less than whole ones. To do this, you specify how much money you want to put toward stock and buy what you can afford; this is good for first-time investors.
Investing in the stock market can also keep you ahead of inflation while you grow your assets. Looking at the past decades, the rate of inflation has averaged close to 3 percent a year, but at various points, it has been much lower and much higher. At the same time, stocks averaged closer to 10 percent. Therefore, investing in the market can allow your money to grow at a faster rate than inflation.
Another good thing about the stock market is its liquidity. Other kinds of investments (including real estate) do not allow investors to withdraw money quickly when it is needed, and the property needs to be listed and sold, taking weeks, months or much longer. Stocks can be bought and sold every weekday (except holidays), but as with other investments, you will be paying taxes on the money you make or taking deductions for your losses.