ECONOMICS (CBSE/UGC NET)

ECONOMICS

SAVING AND INVESTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Buying shares of stock in your favorite clothing company
A
Saving
B
Investing
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -When you buy a share in a company, you’re effectively becoming a part owner of that company. As a shareholder, with an equity stake in that business, the investment return you earn depends on the success or failure of the company itself.

Detailed explanation-2: -Stock market investments have proven to be one of the best ways to grow long-term wealth. Over several decades, the average stock market return is about 10% per year. However, remember that’s just an average across the entire market-some years will be up, some down and individual stocks will vary in their returns.

Detailed explanation-3: -Stocks offer investors the greatest potential for growth (capital appreciation) over the long haul. Investors willing to stick with stocks over long periods of time, say 15 years, generally have been rewarded with strong, positive returns.

Detailed explanation-4: -Do your research and understand the business. Use a mixture of quantitative and qualitative stock analysis to build your portfolio. Avoid emotion when making investment decisions. Make sure you spread your risk by diversifying your portfolio.

There is 1 question to complete.