@Lily.Campbell · Posted 02 Sep. 2021
@Kelly.Jackson · Updated 02 Sep. 2021
Over time, the stock market has generated good returns for investors, but it also declines, posing both a risk and a return for investors. Investing and stock trading have some disadvantages When money and emotions are combined, it is like riding a rollercoaster. A trader can become anxious, depressed, and suffer other health effects when involved in a stock market transaction.
CONS OF STOCKS-
· RISK: Your entire investment could be lost. Investors will sell a company's stock if it performs poorly, causing its stock price to plummet. Your initial investment will be lost when you sell.
· STOCKHOLDERS RECEIVED THEIR DIVIDENDS LAST: When a company goes bankrupt, its preferred stockholders, bondholders, and creditors are paid first. Bankruptcies happen only when a company goes out of business. You should be able to avoid going under if your portfolio is well diversified.
· TIME: Before you buy the stock of a company, you must research it to determine how profitable it will be. Having a solid understanding of financial statements and annual reports, as well as following your company's news is essential for success.
It is also important to consider the disadvantages of investing against the benefits. At the end of the day, you are the only one who can decide if the pros and cons outweigh each other for you and your lifestyle. Additionally, you do not have to be a trader in order to be an investor.