Reasons an individual may be told to invest in the stock market will vary from, “you can get rich quick”, to “you can help businesses build while making money on their success”. Personal criteria to get into the stock market will have the same variables, but it remains a personal decision. If the cards are played “right”, there is a good money to be made in the stock market. People enjoy the potential available to the investor and are ready to risk their hard earned money.
Majority of the people will want to protect most of their money in large organizations that will do better in good times or bad. Organizations offering goods or services like food, cleaning products, or other essential things that people will buy, even in a slow time , are often good investments that pay a dividend. They might not double in price per share in few days , but they offer a steady climbing price and a regularly paid dividend that can be re-invested into the stock of the company.
Mid-cap stocks are a little more risky, but offer some chances of a quick price per share profit . These are small companies that are continually developing new products or getting patents. They may be pharmaceutical companies working on cancer cure medicine or a tech company with a software that offers a major advancement for the internet. They are usually making money with products that are already developed, but they know that if they do not continue to grow, they may die. Doing the research on these types of organizations is very important, and well worth the time and effort.
For people who are not afraid of risking a small portion of their savings , penny stocks provide opportunities for high rewards. Finding a start up company with great returns is the dream of every penny stock trader. Searching their history, ownership, and product, is part of the diligence needed to find a diamond in the rough. The risk is that many of the start-up companies are not successful and so, do not make money. They survive by selling their shares in the company which makes the price per share go down. On the other hand, they may have a piece of a puzzle, long sought after by a huge company that is willing to pay the shareholders ten times their money for their shares, overnight.