How Can Wise Investments in the Stock Market Help You Retire?

Written by Becky Wilcox

The stock market is the home for wise investors. With the right companies, your money will grow over time with inflation. When you keep your money in the bank, it stays frozen. Certain stocks pay dividends and you will share the spoils of their success. You work hard for your money. At some point, you want your money to work hard for you. Analyst ratings today can be very accurate, so stay on top of the news before you make your financial decisions.

The Importance of Planning Early for Your Retirement

Thinking about your retirement early is one of the most important preparations you can make. As soon as you enter the workforce, you should be thinking about your retirement. When you are young, time moves slow. As you get older, time is on steroids. It doesn’t take much to get the ball rolling to establish your nest egg. Saving ten percent of your income adds up over the years. Doing your research online and talking to professionals can give you some confidence. Your retirement years can be the best years of your life if you take the right preliminary steps. But remember, it is never too late to get your affairs in order.

World News and the Stock Market

The stock market flows with the tone of the news. Whatever happens in the world reflects on the market. The thing is, the whole market does not react the same. Certain news can make one sector do good while that same news makes another sector do bad. COVID-19 is the big topic dominating the news right now. This news is affecting the entertainment sector in a negative way. At the same time, biomedical stocks are thriving right now.

It is a good idea to stay on top of current events when making your decisions regarding the market. If you are in the market for the long run, certain news events shouldn’t make you panic. As long as you invest in the right companies, they should stand the test of time.

Technical Analysis and the Stock Market

One of the best ways to study the stock market is through technical analysis. The way you do this is by studying charts of the chosen stock’s historical performance. There are many websites that give you this information on a daily basis. By studying past trends, you can make predictions of how the stock should perform in the future.

Technical analysis indicator tools can help you spot trends, so you can make good investments. These tools are add-ons that you can put on your chart reading software. Here are the names of some of the most popular indicators:

Bollinger Bands

MACD (moving average convergence divergence)

Aroon Indicator

Stochastic Oscillator

Relative Strength Index

How to Read a Stock Quote

When you do research on a stock, it is important to understand the information that is presented to you. At first glance, you will receive data that can give you a rough idea if you should deal with the stock or not. Here is a list of important information to look out for:

Market Cap: The market cap is the number of shares the stock has available multiplied by the price of the stock. The sum of this equation will tell you what the company is worth.

Average Volume: The average volume tells you how much activity the stock has on a daily basis.

Day Range: The day range tells you the lowest price and the highest price the stock hit within that day.

52 Week Range: The 52-week range tells you the lowest price and the highest price the stock hit within a year’s period.

Shares Outstanding: The shares outstanding tells you how many stocks the company has.

Public Float: The public float tells you how many share the company has available to the public.

EPS: This stands for earnings per share. The EPS tells you the profit on each stock.

P/E Ratio: The P/E ratio tells you the company’s share price compared to the earnings per share.

So, should you invest in stocks to prepare for your retirement? The answer is yes. The important thing to do is your research. With proper preparation, stock market investing can be very profitable.

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About LoveBeingRetired

Dave Bernard is a California born and raised author and blogger with an extensive 30 year career in Silicon Valley. He has written more than 300 blogs for US News & World On Retirement and his personal blog Retirement – Only the Beginning. He has authored three books: "Are you just existing and calling it a life?"; "I want to retire! Essential Considerations for the Retiree to Be"; and " Navigating the Retirement Jungle". Dave was also a contributing writer for the books 65 Things to do when you Retire (“Positive Aging – Old is the New Young”) as well as 65 Things to do when you Retire – TRAVEL (“Travel to Discover your Family Heritage”). He lives in sunny California with his wife, his Boston Terrier "Frank" and a passion for the San Jose Sharks.