Why should you invest money in the stock market?


Quick Answer

One of the main reasons to invest money in the stock market is to build wealth, according to The Motley Fool. Also, many people invest in stocks to own part of a business that they don't have to manage and to have shareholder rights, such as voting, reports ShareBuilder.

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Why should you invest money in the stock market?
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Full Answer

Investors profit in two basic ways from stock investing. If the stock price appreciates after investment, the shareholder can make money on the sale of the stock. Stocks allow the flexibility of selling in the short term to make a quick profit or holding on to investments for the long term. Also, many companies pay dividends to shareholders that they can then reinvest or pocket as income, according to ShareBuilder.

Common motives for people to invest in stocks and to make money are retirement, education and recreation. Some investors view stocks as a long-term opportunity to build wealth for retirement. Others invest in stocks to save up for additional education themselves or to pay for their children's educations. For others, building wealth is about creating opportunities for greater leisure and recreation throughout life. The historical return on stocks is about 10 percent, according to The Motley Fool, which is much higher than returns on many other investments.

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