Here’s Why Even ‘The Little Guy’ Should Invest in the Stock Market

Stock market trading apps are making it easier and simpler than ever before

  The stock market. Depending on who you are, the term conjures up dreams of financial opportunity or visions of risk and despair. We've all seen images of stock market crashes – traders with their heads in their hands bemoaning huge losses. But then we also all know someone who seems like an ‘average’ fellow but who has a stock portfolio and is making slow but steady gains. So, should you invest in the stock market? Even if you don't have a huge amount of savings? The answer is Yes! It's impossible to predict the stock market’s movements, of course, but despite this unpredictability, the benefits of investing in stocks remain very much unchanged, and you stand to reap more than you might imagine. The public perception of associated risks with the stock market is not reality. ‘Average’ people need to stop thinking of it as gambling and understand it’s a legitimate form of investing – and understand that stocks continue to be a viable way to build wealth and one that they should not let go to waste. Investing in the stock market is a path to making you money… which you can then use to make more money. But you don't have to fork over a million dollars to get started. A small amount could get you going with an index fund, or buy you a few stocks.

And it's become so easy to get involved and understand the markets. Downloading a good stock market app means you have the information on your smartphone or device wherever you go. The app even has a “demo” mode where you can build your trading confidence, sharpen your skills, and practice your trading strategies 100% risk-free. The app is extremely ‘user-friendly,’ and doesn’t require any technical skills to use or understand. Moreover, you can – via the app – own the share and receive dividends at 0% commission, 0% markups, 0% ticketing, and 0% delay – using your smartphone anywhere, and anytime. And remember, we're not talking about you becoming Gordon Gecko in a flash. The availability of stock market apps is another step in the democratization of the entire process as you don't need to run through any sort of broker.

 Let's go back to that concept known as ‘interest’. Inflation in the US currently is a bit out of control, but in general, the US Federal Reserve tries to keep inflation somewhere near 2%. But even a high-yield savings account doesn't offer an interest rate that high. So, you're not even keeping up with inflation with your money in the bank sitting in a Certificate of Deposit (CD) or savings account. In the case of a CD, your money might be tied up in some sort of contract that ranges from a month to many years, and if you suddenly need those funds and withdraw them before the term ends – the required penalties would immediately erase any savings you've happened to have made from the CD. In the greater China area – including Hong Kong and Taiwan – pretty much everyone from grandma to the just-out of college worker owns some stocks. A housewife living in Taiwan who invests US$2,000 a year in a tech stock can quite realistically earn US$200 in returns, which as we noted above, beats any bank interest hands down. If you are willing to ride out the depressions that occasionally come you have a very good chance that markets will correct themselves and you'll end up making something that is always superior to a bank savings account.

The stock market – despite its ups and downs – and the occasional ‘Black Friday,’ has still averaged a 10% annual return on investments as measured by the S&P 500. You don't need to own stock in Apple or Amazon or whatever company is in fashion at the moment. In fact, diversifying your investments by getting some stocks and perhaps some bonds – and choosing companies that are perhaps not flashy and aren’t going to make you a millionaire but will provide a stable return are wise choices. In short, don't put all your money in one basket. Remember that the stock market isn't trying to steal from you. It's not some evil cabal with a sinister plot. No secret boardroom deals are going on between higher powers to bilk you. With a little bit of research and a reasonably solid understanding of the basics, you can become a successful investor – and remember that doesn't mean earning millions. But bringing in thousands of dollars a year from stocks is certainly not unattainable.