Page 4 - Investing in the Stock Market vs. Precious Metals

Building Wealth
Stocks have long been considered one of the quickest and easiest ways to accumulate wealth. The long-term growth rate of stock markets has been steady over the past several decades, with real returns averaging around 7% or so since the 1920s.1
Stocks are also relatively easy to invest in, as you can buy them from any brokerage or through many retirement plans. And with the development of mutual funds, index funds, etc., it’s becoming even easier to buy stocks.
The major downside to stock ownership is the fact that there are periodic corrections that occur during recessions. Sometimes these corrections can be long-lasting, such as the Great Depression. But that’s a risk you take investing in any asset.
Despite the risks, stocks remain probably the most popular investment
asset around. The ability to benefit financially from the natural growth of the economy and the growth of US companies is an alluring one to many investors. And many investors have managed to build up quite a bit of wealth through investing in stocks.
Dividend Income
Gains in share price aren’t the only way investors can make money investing in stocks. Because stock ownership means that you own a portion of the company, you can occasionally reap additional benefits of that ownership. One of those is dividend payments.
Dividends are normally some portion of retained earnings that are distributed to shareholders of a company. The amount of the dividend paid is normally announced by the company in advance. Dividend payments can be taken in cash, in which case they can form a source of additional income, or they can be reinvested into new shares.
There’s an entire model of investing devoted to investing in stocks that pay dividends. And depending on what your current financial needs are, dividend investing could be something that’s of use to you.
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