Question
Do you agree or disagree with this discussion? The major U.S. stock market index, S&P 500, has returned an approximate average of 14% annual return
Do you agree or disagree with this discussion?
The major U.S. stock market index, S&P 500, has returned an approximate average of 14% annual return for the past 10 years. That means that, even including the recent volatility in the markets, a dollar invested in the stock market 10 years ago would have earned 14% on an annual basis. A single share of a company stock represents ownership, albeit at a small fraction, of that particular company and the stock's performance is driven by the performance of the company's operations, as measured by benchmarks such as revenue, earnings and cash flow. In today's world, there is abundance of information about any company, its operations and stock performance. While buying and selling stocks can seem intimidating, approach this week's readings and the possibility of investing in stocks as buying a rental property. What are some of the things you would consider? Well, to start with you would want to buy it "cheap" rather than expensive, meaning 1) when you buy a stock you want to buy a stock that has not already soared but operates a business that 2) like the rental property will grow in valuation and 3) the cash flow generated from the stock, or the rental property, will grow over the years.
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