What are the benefits of investing in stocks?

There are many benefits to investing in stocks. Seven big ones are: 1. The potential to earn higher returns The primary reason most people invest in stocks is the potential return compared to alternatives such as bank certificates of deposit, gold, and Treasury bonds.

What are the benefits and disadvantages of investing in stocks?

There are clear benefits and drawbacks of investing in stocks. Historically, stocks have generated generous returns over the long-term but investing in stocks also comes with significant risk. Risks of stock investing can be spread across different stocks, sectors and geographies, in a process called diversification.

Why do people invest in stocks?

The primary reason most people invest in stocks is the potential return compared to alternatives such as bank certificates of deposit, gold, and Treasury bonds. For example, the average stock market return has been about 10% annually since 1926; long-term government bonds have returned 5% to 6% annually during the same period. 2.