Treat Yourself to a Post-Holiday Investment
NEW YORK ( MainStreet) The holidays are the perfect time of the year for the younger generation and new investor to stock up on gifts. But if you were unable to tell your relatives early what you wanted in terms of presents, think beyond cash or tangible goods for the new year; instead think shares of stock. They will have a much better payoff than an Xbox 360 or a stagnant C-note in a Hallmark card ever could.
Currently prices within the exchange are higher than usual, but this does`t make a difference when you are holding for a long term position. I always tell teenagers and other young investors to take the liquid assets they obtain from the holidays, and allocate it to your portfolio, because overtime, the money will mature. The stock market is one of the best places for the younger generation, even if you place the funding into a less volatile, safe stock.
Investing at a young age is one of the best moves on a monetary level. You always hear your parents and grandparents say, "I wish I bought stock when I was young!" If you look back through past charts, you can see that in 1985, the Dow Jones Industrial Average was at a mere 2,000 points; by contrast, in the year 2000, the market hit 12,000 points, and today the Dow Jones is stretching 17,000. Foregoing the dips and spikes, the market has been on a longterm positive trend, which should continue through upcoming generations, so take advantage of it now!
Whenever receiving a present of any kind, people usually take the money and place it into the bank. This is something that needs to be addressed, because when putting your money in the bank, the interest you will receive is near nothing. Even when placing your money into a CD, the accrued interest over the selected period (usually a very long time) is still very low and usually not worth it. Unless you have millions of dollars, it doesn't pay to keep your money in the bank and let it sit.
Now lets say you put the money into a stock such as Johnson & Johnson (JNJ), which has a current price of around 95 on the NYSE exchange. JNJ is not very volatile, a safe stock, and you will also receive a dividend of 2.80%, which is much more than a bank would pay in interest. Now not only are you receiving the dividend, but you are also receiving money from the stock as it fluctuates in price. I am not saying to take your money and put it into a volatile security that can move 10% in a positive or negative dynamic each day, yet a modest and steady stock that gives a good dividend and has a huge potential to grow over the years. Doing this is much more beneficial than putting it into the bank.