Equities the 3rd investment choice but 1st with superior investors. Popular investment choices are ETFs, mutual funds, and 3rd place equities. Purchasing equities in the public markets provide more people with the opportunity to grow their wealth, financial security, and retirement independence than any other investment opportunity.
What you learn:
Understanding the basic investment choices means knowing what equity is and how investors can use it to build wealth. By understanding what equities are and how they differ from other investments is useful for all investors. If you use an advisor to manage your investments or do it yourself, equities play an important role in your financial future.
Frequently Asked Questions about equity
What are the types of equity?The majority of investors view equity as either common stock or preferred stock.
But accountants point out that the company financial statements can list other types of equity, including the company capital, earnings surplus from operations, retained earnings from earlier years, and any treasury stock the company holds.
Those common stock or preferred share equities are the third most popular investment choice. While their popularity ranks behind ETFs and mutual funds, equities are the first choice of informed people like no-worry investors.
Investors most serious about wealth building consistently use equities to deliver the best stock market investment returns.
Successful investors prioritize equities as their top investment choice because they consistently provide the best wealth-building returns.
Although ranked 3rd behind mutual funds and ETFs on the list of popular investment choices, investors who understand the potential for long-term gains favor equities.
That makes equities the go-to choice for anyone serious about investing to maximize wealth-building and financial growth.
These three basic stock market money-making strategies have many variations.
Investors use the simple strategy of buying high-quality dividend-paying stocks as long-term income and wealth-building assets in all market conditions.
Traders chase short-term profits by buying rising stocks to sell at higher prices. That can be more profitable than income investing when markets are rising. However, consistent performance requires more knowledge, time, attention, and favorable markets.
Speculators accept more risk buying unproven or no-cash-flow ventures to seek huge returns. Although this approach can produce spectacular profits, it is prone to failure. Profitable speculators have significant knowledge, expertise, skill, and trading experience.
The primary and secondary markets are the two equity markets.
The primary market is the initial public offering (IPO) or first sale of newly issued stocks or bonds listed on an exchange.
The secondary market is every market in the world that trades shares. This trading occurs after the IPO and continues as long as the shares remain listed on an exchange.
Equities are the top choice for informed investors, but they rank third in popularity. That happens because well-paid salespeople aggressively promote mutual funds to compete with ETFs for the top spot.
Still, investors committed to wealth-building learn to select the best equities and produce the highest returns.
For investors, asset classes include equities, cash, currencies, bonds, commodities, real estate, and alternatives. For wealth building investors, equities rank 1st although both ETFs and mutual fund sales push past equities making it the overall 3rd choice in volume. But for those serious about wealth building, equities, are the pick that consistently performs as the most powerful long term wealth builders. While all asset classes experience degrees of volatility and cycles in value, only equities show the best long-term productive wealth building growth.
What is the difference between equity and shares?Equity is the ownership of a company; a share is a unit of ownership. As such, these terms have similar or closely related meanings.
Equities are the 3rd choice among big investment choices but rank 1st with informed investors. The most popular investment choices are ETFs, mutual funds, and equities, the 3rd choice.
But equities are the pick for anyone serious about wealth building because they are consistently the most potent wealth builders.
Equities the 3rd choice of superior investors
Equities or the universe of stocks listed on public stock markets underlie both mutual fund and ETF investments. As holdings of stocks make up the bulk of the assets in almost all the investment portfolios assembled by both.
For retail investors, stock markets offer the greatest upside possibility of all publicly traded choices. By directly purchasing shares, or the stock of individually listed companies, investors expose themselves to a vast range of excellent upside possibilities. Investors have over 60,000 choices when selecting how they want to invest in equity markets!
Know costs and risks to make investing profitable
To get started most people need some help to develop the knowledge and understanding of how to invest well. Critically, most new investors need help keeping costs low and avoiding and manage risks.
With low costs and the ability to recognize, avoid and manage risk, we can learn how to safely place ourselves in favorable situations with the best upside prospects. With a little effort, anyone that knows grade five math can learn how to invest well.
Individuals that regularly invest modest amounts of money can definitely grow their wealth over time. The essential keys to achieving such success are regular participation in the market and secondly, participation over a long time. The sooner you start the better off you will be. The very best time to start is now!
Investing is a very long game
Investing is a long game. And to play well you should think of being the 100-year investor! Play as if you are going to at least continue until you are past 90! Ninety because in only a few years that will be the average expected lifespan! As the average, half of us will be going even longer!
That means you need to make your wealth plan span at least 90 years! You had best get started! Equities the 3rd choice but 1st with superior investors because that delivers the best, most secure, least costly long-term results.
Investing regularly over a long time can develop even a modest investment program into a financial engine that delivers an exponentially larger fortune. Do that faithfully can build you financial security and retirement freedom.
Knowing what to do and how to do it makes investing easy, interesting, and safe. Accomplishing that is exactly what we intend to help you do.
In each White Top View blog post we present a bite-sized discussion of some aspect of investing. Over time we will cover a great many aspects of investing. Your questions and comments are welcome here.
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Use White Top Investor lessons to learn investing. By doing that you can grow into a knowledgeable, comfortable, and confident investor. To learn how you can learn investing one small step at a time at your own pace. Do that and become the master of your financial security and independence. White Top Investor never sells or shares our email list. Learn more.
Money Choices That Grow Wealth lesson links:
Introduction to Money Choices Grow Wealth Lesson 1
3 Stock market approaches Lesson 2
Income, value and growth investing Lesson 3
Aggressive trading chases profit Lesson 4
Momentum investing trading play Lesson 5
Speculation big returns for big risks! Lesson 6
3 Distinct investing approaches Lesson 7
Speculation complications trade risks for returns Lesson 8
Middle trader thinking differs Lesson 9
Investing trading and speculating differ Lesson 10
Speculation failures improve investing Lesson 11
6 Other investment choices Lesson 12
3 Big investing choices Lesson 13
Buying ETFs accelerates returns Lesson 14
Equities the 3rd choice Lesson 15
Next suggested course: How Investors Track Money
Have a prosperous investor day!
Bryan
White Top Investor
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Lesson Code: 345.04.
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