Proper planning and wise asset management can help lead to attaining financial security once you’ve retired. Investment growth generally occurs over longer periods of time so starting early and investing in a consistent manner by working with an experienced wealth management firm serving investors in the Metro DC area is a good place to start.
Here are three reasons to invest in stocks:
- Stocks are relatively cheap these days.
Some economists think that the S&P 500 is still currently undervalued—soft total profits in the first quarter of the year considered. Using a capitalized profits model to evaluate stock market values, you’ll find that S&P 500’s “fair value” is at 4,335.
This number seems too high, but it’s all by design. The Federal Reserve holds down discount rates to keep short-term values at a minimum. With a 4% 10-year discount rate instead of the Treasury’s current 2.35% rate, you’ll get a fair value of 2,550.
This computation shows that the bull market still has a long road ahead of it. It’s never too early to start talking to wealth management firms serving the Metro DC area about investing.
- Reported weakness in overall corporate earnings is nothing to worry about.
The energy sector did take a hit recently. Prices for oil and natural gas went down by about 40% from last year’s figures. At face value, that would seem alarming.
However, you have to remember that energy is only one sector of the market—and a rather small one at that. To date, the energy sector accounts for only 3% of overall corporate profits. When you invest in stocks, it is best to have a wide variety of stocks across multiple industries that account for the ups and downs that inevitably hit certain sectors.
- Weak earnings in one sector do not always lead to a dead end.
Silver linings do exist in the market, after all. The idea is quite simple. After pulling out their resources from a weakened section of the market, consumers and businesses will turn to other products and investments. In other words, weak earnings in one part of the market is bound—over time—to generate higher earnings in other sectors.
There are no shortcuts to financial security, but investing in a diversified set of stocks as a long term strategy can be beneficial. If you’re thinking about retiring, contact an expert in wealth management serving DC, Maryland and Northern Virginia investors to help you evaluate your investments options.
Turn to AOG Wealth Management. We can help you jump-start your retirement plans with a solid investment management program. Give us a call today at (866) 993-0203 to learn more about what we can do for you.