Why stocks instead of other investments

To fully document my path, I must back up a little. It took a long while to conclude that stock trading is right for me. The facts are also that stocks might not be right for you. Search yourself grasshopper, find the truth from within.

I found out that my checking account pays no interest at all. Zero is definitely insufficient for meeting my investment goals. Next comes the savings account. A little interest is paid, great liquidity, and loss avoidance are presented so savings is a key element of my strategy.

Certificates of Deposit (CD's) are a tradition in my family but on analysis, liquidity is poor and the amount of interest paid is still very low. Often CD interest payouts are less than cost of living increases. The capitol gain looks nice on paper however taxes and the general economy knock this investment vehicle right out of my list.

Bonds are interesting to me. However, I have found that again, payout is generally low. Some bonds do have interesting rates but only at increased risk of loss. Since I don't understand the risks, for now, I'll stay away. Further, the laws of compound interest are limited by bond maturity dates.

This leaves things that can hurt if you drop them on your toe: art, guns, coins, metals, autos, and bottles of Jack Daniels. Too me, these things are at risk of damage, theft, consumption, and market variations; Things that I can not control. I'll pass. Likewise, real estate. In my little mind, my house is more a liability than an asset. My real estate investment is a necessity, so I have taken steps to protect it: I have insurance, savings, and a territorial dog. Additionally, I bought an inexpensive house and paid the mortgage off early. This in my mind makes for a safe investment.

I popped up a spreadsheet one fine day and began by populating some fields with numbers. Numbers like: what I have available for investment, how much more I plan to contribute each year, how many years I'll let my money work for me, and finally, how much I want at the conclusion. Then I experimented with different values of "rate of return" until I found a match. It seems that very few investment vehicles have the capacity to make the numbers balance. (No! Neither the lottery or the gambling houses are investment vehicles.)

As I write today, I have watched my Google investment vary between up a percent and down a percent. Think of that! Two percent in a single day! Sometimes more! Here is something that I have some control over, (in and out of the position on demand) and it could make a considerable amount of my yearly needs in a single day! The stock market is awesome! I am committed to travel this path. I shall become a stock trading master; a master of Market-Fu.