With or without leverage, investing in common stock is an exciting and highly profitable way to enhance the performance levels of your investment portfolio. The merits attached to this highly popular asset class, are plentiful and attractive in this protracted period of prevailing low interest rates.
Blue Chip Stock Market Exchanges Are Liquid
Unlike real estate and micro-small cap stocks, blue chip stocks are highly liquid, allowing investors and traders to buy and sell at will, without worrying about finding someone on the other side of the trade. Additionally, the choice of sectors available is large, which allows you to diversify your exposure to market performance risk across a broad range of businesses.
An Asset Class Suited To All Risk v Reward Ratios
If you are seeking high v risk reward returns via a bull or bear 3 x leveraged Exchange Traded Fund, or alternatively, a Call or Put Option contract, then with equities this can be done. On the other hand, if plain vanilla one to one cash stock investing is more your thing, then this is also available . Finally, if you prefer the likes of penny stocks, with their potential for above average percentage point returns, again micro / small cap stocks can offer you this.
Equity Markets Are Regulated
For an investment market to operate properly with transparency and tight governance, regulation with its array of legislation is a must. All of the world’s major equity markets have thorough regulation which allows for open, transparent and orderly market participation. Without regulation it’s rather easy to revert to market abuse and disarray, which no honest and diligent investor wants.
Quickly Change The Balance of Your Investment Portfolio
Stock markets are in a continuous state of change due to a multitude of factors – macro-economic, sector/company specific and for various technical and fundamental reasons. Simply put, these changes are a consequence of our free market capitalist system. Fortunately, this gives rise to market drivers moving from one sector to another, and thus provide regular opportunities to tune and align your listed equity investment portfolio in direct correlation to market direction and positive price progression.
Market Neutral – Short or Long
Investing in equities can allow you to make money from both rising and falling stock prices , depending if you are a bull or bear investor. This in itself allows investors a welcomed additional option to flourish in two market conditions. Not many other asset investment classes can offer you this flexible option.
So in conclusion, equity market investing has a wide and fruitful array of profitable and risk v reward benefits, in addition to flexibility, transparency, choices, options and time frame solutions. Quite clearly, if you are an astute investor, equities should form part of any well diversified investment portfolio.