You hear all the time that the stock market is a great place to invest your money and that you should buy and hold stocks for the long term. But what exactly is the stock market? Why is it that people tell you to invest into it? And what are you actually buying?

If you are wondering these questions then you will want to start learning about the stock market and how it works. This article will give you a brief intro to it and what the advantages of investing into it are.

Companies are split into millions or billions of different shares called stocks. Anybody can buy a stock and become a partial owner of a company. For instance if you buy McDonald’s stock then you would actually own a portion of McDonalds and would make money as the company grows.

Some companies even offer dividend paying stocks which are stocks that will pay you a monthly income each and every month simply by holding onto them. These dividends represent a small portion of the company’s earnings. Since you own part of the company it would make sense that you make money as they do.

The stock market is just the place where stocks are bought and sold. You can participate in the stock market account by simply opening up a brokerage account and placing buy and sell orders.

So, why should you take part in this?

1. Growth

This is the biggest reason why you should invest into stocks over the long term. They simply outperform all other major asset classes. If you look at how stocks have performed over the long term and compare that to things like CDs, Real Estate, and Bonds, you can see just how great of an investment they have been in the past and how good of an investment they will probably be in the future.

2. Income

Because stocks do offer dividends they can help you obtain some extra passive income. As your money grows over time the amount of income that you receive off of the stock also increases.

There are a lot of professional investors out there who started investing into quality stocks and as time went by they found that they were able to live off of the dividends that were being produced by their investments alone.

Investing into the stock market can lead to financial freedom and a lot of passive income if you invest wisely and make good decisions.

Now that you know a little bit about the stock market it is imperative to learn more about it and the strategies that are out there to help you increase your returns if you want to succeed with it. To do this you can visit this site about investing into stocks. Free reprint avaialable from: Whar Are Stocks?.