Rewards from stock investing

In my previous piece of writing I have given the concept of stock investing. On this page I would like to tell you about the reward you will get by making a stock investing.

From long term perspective the rewards from stock investing are pretty good if you are only in just right stock at right time and that you can achieve with the help of fundamental and technical knowledge.

Assets history has proved that there is no other asset class where investors had made pretty descent earnings other than stock market in long term, but for that the only thing is that you just need to be in right stock. I would once again like to emphasize on just right stock. There are tons of stocks traded on stock market but not all stocks can give you descent returns on long term basis so your choice for stock investing on long term basis should just needs to be perfect.

Once you are in perfect stock your long team earning will grow substantially, the more than you have expected. The rewards you will get in long teams are
• Dividend: Dividend is a distribution of a portion of a company's earnings allotted to the shareholders. The board of direction decides the amount of dividend to be given to shareholder i.e. dividends per share. If the company is making a consistent profit chance of getting dividend once in two years, annually or biannually is high. The dividend can be in cash, bonus shares/stocks, or property.
• Substantial price increase in your stock holding
• Allotment of subsidy shares if any merger or de-merger of another section from the one main company happens.

The person who had made stock investing in the very early days of stock like Wal-Mart, Microsoft, or in any other Fortune 500 companies had achieved significant growth in their asset. In the future there will be new companies replacing the place of Wal-Mart or Microsoft or any Fortune 500 companies and you have to hunt such companies for your asset growth and to get steady return on long term basis.

Stock portfolio

Stock portfolio is a very strong professional stock trading tool if managed in proper and effective way gives you high and high returns in stock market by any other mean is not that quite possible. Stock portfolio provides you an additional security and decreases your risk appetite in significant way in stock market.

Stock portfolio is a mixture of any number of stocks mostly preferable for small stock market investor or stock market trader is 10 to 15 numbers. Stock market traders prefer to have 10 to 15 numbers of best stock collections in their favorite stock portfolio which helps them to execute stock trading almost on daily basis. It always does not happened that day traders are able to conduct their day trading in only one specific stock on daily basis because they know that only one stock cannot give them a perfect entry point on daily basis to conduct day trading so to overcome this issues they prefers to have 10 to 15 stocks or more which helps them to give chance to enter in any 2-3 stocks for day trading on daily basis.

Professional stock market investors also prefer to maintain 5 to 10 numbers or a bit more of best stocks in their stock portfolio. By investing money not only in one stock but diverting the money in mixture of stock gives them an additional security and reduces their risk appetite. The stock portfolio consists of mixture of stocks such as large cap, mid cap, highly volatile stock, highly defensive stock, highly liquid stock, very less affected by external factor stock, etc. The stock investor prefers to maintain portfolio as per their investment horizon and amount of money they want to invest in their best stocks.

Now you might be thinking about how the stock portfolio will give high return and will reduce risk?
As it is know the stock trading or stock investing is a risky factor to make money. No doubt that if your stock pick selection is perfect from all angle chances are evergreen that you will make handsome of money, but still it is having said that there is still risk associated in it, because the external factors which might impact your stock pick is not in your hand and nor you can imagine it, which might cause the stock dump.
The external factors might consist of
• interest rate.
• crude oil dependence
• government policies
• natural disaster, and many more
which might negatively influence the specific stock pick you are holding, so to overcome this issue you need to make stock trading or stock investing in more than 2 to 3 stocks of different categories as mentioned above which will help you to trim down your risk associated only in one stock.

The stock portfolio is only established after a strong stock research which you want to include in your portfolio. Stock research includes the fundamental as well as technical study which gives a correct view about the overall performance of your favorite stock pick. The some of the categories in stock portfolio but not limited to are:

Large Caps
• Large cap stocks are stock with market capitalization of more than $5 billion such as IBM, Microsoft, Wal-Mart, etc
• You need to keep these types of stock in your stock portfolio because these stocks are consistently out performer in their whole history and will remain out performer in future also
• This stock has a deep market penetration, endurance and solid business management background and has a capacity to cope with any unsuitable condition.
• These stocks make consistent good innovative changes in their product which gives you an assurance and faith that you money is always safe and will give you high returns.

Mid Caps
Mid cap stocks are stock with market capitalization between $1 billion to $5 billion.
• There is slight risk as compared to large caps in doing stock trading or stock investment in these stocks because mid caps stocks does not always give that much of consistent performance as compared to large caps.
• Also there is lot of competition in mid cap companies which might impact their profit margin in significant way along with inconsistent market base
• But still if your have done strong stock research and have pick out a good mid cap stock which might sustain at any unsuitable condition and has a capacity to become a large caps in coming years then you have a very good potential to make good money in coming days.
• The advantage of investing your money in mid cap is that the mid cap stocks has a big room to become a large caps which will increase it market capitalization giving you high stock price return along with other benefits.

Small Caps
Small cap stocks are highly risky stocks and are also called as penny stocks.
• There is sudden inflow and sudden outflow of funds from these stocks which makes these stocks more vulnerable.
• If at any point any uncertain situation arise in the stock market, these small caps penny stocks are the first which are hammered significantly, but also if there is any strong rally in stock market, these stocks have a big potential to go high giving you high returns.

So to increase your efficiency and to maintain consistent profit from stock market you need to be more specific in selecting your stock portfolio. Consuming mixture of stock pick of different categories and of different business aspect will end up giving you consistent money at low risk.

Long term stock investment

Stock trading done for long term basis can be purely said as long term stock investment. Investing in stock if done in more regular strategic investment way can give you high returns. Many stock market investors basically retail investors are quite interested for long term stock investing plan rather than going for short term margin gain which is quite risky. Long term stock market investment gives an additional leverage position to a stock market investor if the stock pick choice is right, and also it does not get affected by the short-term volatility in the stock market.

Long term stock investment is more profitable and with regular performance of chosen stock pick (company) the stock investor gets regular dividend as well as bonus which is quite encouraging and cheering to investor as well as it spreads a message among stock market investor about the company’s goodwill, which helps to keep on consistently rising the stock price and generating high return to stock investor.

Long term stock investment is basically done keeping in view for making an investment for minimum of five years to as long as the stock investor prefer to keep it as an investment. Investors who generally gets regular returns via that stock pick through a source like regular dividend and bonus does not sell that specific stock pick and keeps on holding that stock pick as long as their best stock market investment is performing good by maintaining the current market share and well as increasing its company brand to more customer base.

Before going for any long term stock investment approach, proper study of best stock is needed along with proper strategic investment plan. Long term stock investment is usually done in the stock which has a good reputation, which has gained stock market investors’ confidence and which is performing very well at every time interval. Stock prices are always volatile and do not remains stable at any point, with keeping this in mind, no full investment in stock is done at one point, but professional stock investor use strategic investment plan which help them to make regular investment in their same favorite stock at various prices of their stock pick. The strategic investment plan is done in two ways.

1. Stock market investor who are more confident on their chosen stock pick make regular investment in stock at every significant dip in their favorite stock pick, keeping in view the long-term returns. The stock market investor who makes investment in stock through this strategy uses every dip in their favorite stock pick as an opportunity to make their investment.
2. The second way the stock investors invest their money in their favorite stock pick is by regularly investing at every rise that happens in their stock pick. Stocks which are consisting performing well always have a chance to rise higher by gathering more attention of fellow stock investors.

With the help of these strategic investment plans, the stock investors invest their money in their stock pick at every specific time interval which reduces their risk appetite and protect their money at every ups and downs of stock market.

The some of the long term stock investing benefits

1. Your long term stock investment return is always high than of fixed deposit or small savings in bank.
2. Gives you an additional leveraged position against rising inflation.
3. Regular returns from stock investing in the form of dividend and bonus if the stock pick is consistently performing well.
4. You are always a share partner of successful corporate of whom you are holding stocks.
5. Historical out performer than any other asset classes.