Are you an ‘owner’ or ‘consumer’ ?

Do you know giant size companies make profit on every dollar you spend, as a ‘consumer’, on day-to-day needs like groceries, gas, fashion accessories and more. And these companies share their profit with people like you and me;

Hold on, nobody told me that I can be a joint owner of facebook or shopify !

Simply by buying common-shares you can be part of the ‘owners’ group and claim your slice of the bigger cake!

Why Stocks deemed ‘Risky’

Reason why people like to avoid buying shares/stocks is because the market price of the share depends upon a larger number of factors including business performance, every changing market/technology or political/economical influence and so on.

How to lighten the risk

Key is that don’t put all your eggs in one basket ; that’s known as ‘Diversification’. Imagine if someone invested all savings into BlackBerry in 2007 when the stock price was over $200 which is today less than $20.

Not enough money to diversify

It’s true that to buy stocks of several different companies you need a significant amount of money in hand.

So back to square one ?

Without risking your hard-earned money you can still make a fair amount of profit (much better than GIC) via Mutual Funds; The money is collected from a larger pool of investors and then ‘diversified’ to buy a number of stocks in different industries like technology, finance, consumer goods and so on. This is known as ‘sector diversification’

The experienced Fund Manager keeps trading (buying/selling) these stocks on your behalf which increases the market prices of the fund-units. The profit is shared in the form of dividends and also you can make money by selling the fund-units at a higher price in the stock market.

Time-tested approach

There is no control on the market that reacts to almost all major political or global economical changes. Historical data is evident in the fact that the market always recovered from all types of recessions and climbed up for even better returns. In a nutshell, patience and long term lookout is the key to make money. ‘Keep invested’.