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6 Reasons to Learn About the Stock Market and Trade Shares

Ever been interested in trading shares? Have you always wondered how stock brokers earn huge salaries? Have you ever thought trading stocks was �risky�? Read below to find 6 good reasons why stocks aren�t �risky� and why you should investigate the stock market further...

1 Stop losses

Stop losses allow you to set a price at which your stock will automatically get sold. E.g. you buy a stock for $10 and set a stop loss at $9, this means you will only ever lose $1 but stand to gain a lot more than $1. All online brokers allow you to set stop losses and it does not cost anything to set them. Stop losses take the risk out of trading as you are setting your maximum loss each time you place a trade. Stop losses break the myth that trading stocks is extremely risky.

2 Dividends

Companies pay out dividends if you hold their stock. It is their way of splitting their profits with you. Companies will often pay around 2-5% dividends each year meaning if you have $10,000 in a company�s stock and they pay a 5% dividend then you will receive $500 for not doing anything, not a bad little earner eh!

3 Beating recession / short selling

Although the recession seems to be coming to an end, if another recession happened you would be able to make money by shorting stock. This is a concept that allows you to make money when stocks are going down. If you can learn how to successfully short stocks then you will never have to be affected by the recession again.
Being able to short stock also reduces the risk in trading. This is because when the market starts to fall, a trader can close their long trades and start to short other trades instead, meaning a trader can make money when the market goes up and down.

4 The lifestyle

Trading shares from home allows you to adopt a great lifestyle. There is no pressure from bosses and you do not have to deal with other people�s problems meaning you can solely focus on yourself. When trading shares your day can often end early leaving plenty of time to focus on other activities. Trading shares also allows you to have as many holidays as you like, if you do not want to work for a day/week/month you don�t have too!

5 Tax advantages

The US and UK have favourable laws regarding tax paid on stock market profits. The US does not tax stock profits if you earn a low income and in the UK, the first �9,600 you make is tax free. Compare this to income tax in the UK where only the first �6,475 is tax free.

6 Never be unemployed again

The last recession has seen millions of people lose their jobs. Trading stocks means you can never lose your job, as you are your own company and boss. Even if you appreciate job security, and are unwilling to leave your job, learning about the stock market is worthwhile because if you ever were to get sacked you would have an income stream to fall back on.

Article Source: http://www.fresh-article-directory.com

Article submitted by Matthew Merriman. Visit Shares Explained .com for more information about shares and the stock market.