Why invest in the United States Stock Market?
Investments 101
9.11.2024 1:05 AM
The United States Stock Market has created enormous sources of wealth over the years. For example, Warren Buffett, the sixth richest person in the world, built his wealth by investing in stocks. So, if you regularly invest a part of your income, in the long term, you can see your money grow exponentially.
In addition to high returns, investing in the stock market brings many benefits such as investment security, liquidity, and the fact that there are no minimum amounts required. What makes investing in the stock market so attractive? In this article from Hapi, we’ll explain in detail the benefits of investing and why you should consider becoming an investor in the United States Stock Market.
Stock exchanges are organized and regulated markets where investors, institutions, and companies buy and sell financial assets such as stocks, bonds, and ETFs.
A stock represents a share of ownership in a company. When someone buys shares of a company on the stock market, they enjoy the company’s results in proportion to their ownership.
For example, if someone buys shares in a tech company experiencing significant growth in sales and profits, it’s likely that the value of those shares will increase. In this scenario, the investor could sell their shares on the stock market at a higher price than what they initially paid, thereby making a profit.
One of the main attractions of investing in the stock market is the potential to obtain high returns on investment. Unlike other forms of investment, such as bonds or fixed-term deposits, where earnings tend to be limited, the stock market offers the possibility of significant gains through rising stock values and the payment of dividends.
Historically, the index of the 500 largest companies in the world, the S&P 500, has provided an annualized average return of 10.3%, which surpasses many other forms of investment.
Despite market fluctuations, the stock market has demonstrated an upward trend over time. Investing prudently and for the long term can provide security and profitability to your portfolio.
The companies that created the technology and innovation around you are listed on the stock exchange. From the phone and computer you use (with shares in Apple, Microsoft, or Google) to the streaming platform you enjoy in your spare time (such as Netflix, Amazon, and Disney), the best companies in the world are listed on the stock market and you can own them. This allows you to benefit from their long-term growth and have them work for you.
Another advantage of investing in the stock market is the liquidity it offers. Unlike other alternatives, it allows you to buy and sell assets instantly. Imagine if you invested in real estate – how long would it take to find a buyer? Even in the case of fixed-term deposits, you depend on the period you commit to investing. With stock and ETF investments, that’s not a problem, as you can participate in the most liquid investments from your phone.
At any time, investors can buy or sell shares quickly and efficiently, providing flexibility to adjust their portfolio according to market conditions or financial goals.
There’s no reason to wait until you’ve saved large amounts! With apps like Hapi, you can start investing with just $5 and buy stocks and ETFs. Gone are the days when you needed large sums to invest in the stock market. Thanks to technology, anyone can start being an investor!
Additionally, we offer the option to buy fractional shares. This means that if a stock you want to invest in costs more than you have in your purchasing power, no problem! You can invest the amount you have in dollars and own a fraction of that company. For example, if you have $20 and want to invest in a stock priced at $100, you can buy 0.2 of a share.
You’re likely concerned about increasing the value of your money in the long term, especially in a region like Latin America, where inflation keeps rising. In this scenario, investing in dollars, the strongest currency in the world, in more stable and promising markets, is a great option. This way, you can earn returns that outpace inflation in the long term.
By investing in different company stocks and ETFs from various sectors and geographies quickly and easily, you can reduce the risk of your portfolio. This helps diversify and protect your investments against issues that may affect a specific sector.
For example, you can build a diversified portfolio composed of equity and fixed-income ETFs to have less volatility in your investments. With the stock market, you choose the risk you want to take.
Investing in stocks that offer dividends is a smart strategy to achieve your long-term financial goals and obtain passive income.
By purchasing shares, which represent part ownership of the company, you have the right to receive a portion of the profits the company regularly distributes as dividends.
This practice provides financial stability and contributes to the constant growth of your investment over time.
The stock market offers a variety of opportunities for investors of all levels. You no longer need large sums of money to start investing. With platforms like Hapi, you can take your first steps into the world of investment with ease and security. Don’t wait any longer—start investing today and make your money work for you!
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All investments involve risk, including the loss of capital. Hapi offers self directed investment accounts for those investors who feel comfortable managing their own investments. For a full list of our disclosures, please visit our disclosures page.