3 Reasons to Get INTO the Stock Market Right Now

3 Reasons to Get INTO the Stock Market Right Now

Despite the recent plunge learn how you can still make money buying and selling stocks

Right now the stock market is falling. China is manipulating currency and trying to fix its economy to the detriment of the world economy. Some of the biggest companies in the US, like Wal-Mart, are showing a huge drop in profits. So now is the time to get into stocks.


It’s not because we are in a potential stock correction – where overvalued stocks are knocked down to reasonable prices. It’s not because stock prices dropped and are basically on sale. It’s because you should always be in the stock market. Let me explain.

What Are You Working For?

Get Rich Dad's 6 Rules for Investing in Stocks.

There are three characteristics about the stock market that make it such a great vehicle to build wealth. Remember the richest man in the world, Warren Buffet, he used the stock market to build his wealth. The three characteristics are:

  • Liquidity
  • Agility
  • Scalability

Stocks Are Liquid

When investing in stocks, you can choose how you want to get profits. The two primary approaches are to seek capital gains (selling our stocks at a higher price than we paid for them) and to generate cash flow (creating new money). Seeking cash flow is the Rich Dad way because it allows you to control the situation better than just buying stocks. Either way, the stock market offers us the ability to easily buy and sell your paper assets. This is liquidity. Liquidity is the ease with which an asset can be converted to cash.

By comparison, right now there are many people who would love to sell their real estate. But there’s just one problem—it’s hard to sell because financing is hard to get right now. And even if you can find a buyer it takes months to get the deal done. Real estate is not liquid.

Liquidity is important so you can always have a beneficial exit strategy. That’s one thing you will love about the stock market—it offers investors good liquidity. If one of your stocks begins to go down, the market liquidity allows you to sell it quickly before you have sustained a damaging loss. It also allows you to go from a good investment to a better investment in the blink of an eye.

Another advantage of liquidity is that a person doesn’t need to have tremendous sales and negotiation skills. Stocks allow you to make sales without being a salesman. That’s a huge advantage to a lot of people. Just click a button and... sold! You don’t even need to be charming.

There’s some irony to the liquidity of the stock market, because very few people actually take advantage of it. Many investors hold the same stocks and mutual funds year in and year out, and never think about selling a good stock for a better one or using any kind of exit strategy to maximize their profits. There is also a little hypocrisy here on the part of the big institutions that tell you to buy and hold. Stocks only fall when there are more sellers than buyers. While you are holding, the large institutions are often the ones selling!

Another thing to consider is that the liquidity of the market can bring an increase in volatility. The ability to buy and sell quickly can cause huge swings in supply and demand. Depending upon your situation and investing goals, this can be either a huge negative or a huge positive. There is not a one-size-fits-all answer. Right now we are starting to see volatility. There will probably be even more volatility in our market in the years ahead. But the right investing strategy can use that volatility to your advantage!

Stocks Are Agile

When most people think about profiting from movement in the stock market, they think of one direction of movement: up. They don’t understand the concept that stocks are agile. You can learn to profit from a stock no matter if it goes up, down, or sideways. That’s very tough to do in business, but in the stock market, it doesn’t matter—because there are profit strategies for movement in any direction.

The stock market is probably one of the easiest investing vehicles to earn a profit in relationship to the economy. When the stock market goes up you can buy stock, and when the stock market goes down you can short stocks (shorting a stock is positioning yourself to make money when the price falls). If you use the stock market and the options market in harmony with each other, there are many income strategies that can provide cash flow even when the stock market is stagnant or going down.

Stocks Give Us the Ability to Scale

There is a common misconception that you need a lot of money before you can begin to invest. Fortunately, investing in stocks allows almost anyone to begin their investing sooner rather than later.

Because buying stock is buying only a share of a company, buying stock is more affordable for the average person than buying an entire company or starting a business. But the beauty of this is that you can own exactly the same stocks as a famous investor like Warren Buffett. The difference is that, as a new investor, you’ll probably buy a smaller number of shares than Buffett. A company you want to invest in may be a multi-billion dollar enterprise, but you may be able to get a single share of its stock for just $25. The cost effectiveness of stock allows you to scale up into your investing as you gain the means to go bigger. For the average person, this is a faster way to invest than saving up for decades to purchase a franchise or some other business.

Another avenue of profitable stock market investing is the options market. An option is the right to buy or sell a particular thing at a specified price within a set time frame. Just as we saw with stocks, options are also a very affordable way for anyone to begin their investing. As you advance in your knowledge and experience with options, you might be surprised to find just how much stock you can take control of for relatively small amounts of money and risk.

Scalability permits almost anyone to quickly place an asset on his or her financial statement. In fact, acquiring an asset with stocks can be done faster than any other asset class.

One Word of Caution

No investment is good or bad. There are no such things as bad investments, just bad investors.Your investment is only as good as you are. Before you get in the stock market you need to get educated.

There are so many ways to get going with your education. You can take online courses, attend local workshops, or read a bunch of books.

But please, do not go into stock investing without first investing in yourself and your education.

Download Rich Dad's 6 Rules for Investing in Stocks

Original publish date: August 25, 2015