Читать книгу Investing in Your 20s & 30s For Dummies - Eric Tyson - Страница 14

If you want the potential to share in the growth and profits of companies, you can gain it through buying shares of their stock. Stocks are shares of ownership in a company. You can buy stock directly in individual companies through a brokerage account, or you can buy a collection of stocks via a mutual fund or exchange-traded fund (see Chapter 10).

If you’ve followed the financial markets at all over some time or have friends or family who have spoken to you about this, you may have heard of companies/stocks like Amazon, Apple, Chipotle, McDonald’s, Microsoft, Netflix, Ross Stores, Tesla, Ulta Beauty, and so on. Those who bought and held stocks like these made big returns over the past decade. Remember, though, that we’re saying and seeing this now with the benefit of hindsight — looking in the rearview mirror. And, I’m sure you know that the future will be different than the past, so running out and buying these stocks now is far less likely to make you a mint going forward.

Now, what if I told you I've invested in and made good money in all of these stocks over the past decade? The fact is I have, but I never personally chose any of these particular stocks. I’ve owned these stocks and numerous other good companies and their stocks through mutual funds I’ve invested in. Of course, it’s impossible for any fund manager to only have a portfolio of the best winners or winners in general. Some of their stock picks will be mediocre and others worse.

You don’t need to be a business genius to make money in stocks. Stocks in the United States, for example, have returned an average of 9 percent per year over the past two-plus centuries. That may not sound like a high return but at that rate of return, your money will double every eight years! Simply make regular and systematic investments, and invest in proven companies and funds while minimizing your investment expenses and taxes. Of course, there’s no guarantee that every stock or stock fund that you buy will increase in value. In Chapter 8, I explain proven and time-tested methods for making money in stocks.