Stocks are long distance runners
A stock investment represents shares of ownership in a corporation. Stock owners share in the good and bad fortunes of a company as reflected in its stock price and dividends. If a company grows and prospers, share value generally rises.
Although they are more volatile than bonds, over long time periods the stock market has produced higher returns. Specifically, smaller stocks can be riskier than their larger counterparts; however, history suggests they can also provide higher average returns. Another important note: stocks also have the best record of producing returns that outpace the inflation rate.
The stock market will vary substantially from day to day, and it may go for months on end in the same trading range, but over time, it has maintained its steady upward trend. Therefore, if you’re working to achieve a long-term goal—five or more years away—a stock fund is a great way to diversify your portfolio while potentially benefiting from stock market returns.
Stay on trackMany investors are grappling with focusing on retirement goals when their day-to-day expenses are taking a bigger bite out of each paycheck. It can be hard to save when everything from food to utility prices are on the rise. But “now” is always a good time to invest. People rarely get rich on a paycheck alone. Real wealth is built over time, and history has shown repeatedly that investing in the stock market is one of the best ways to achieve financial freedom.