WHY TO STICK TO LONG -TERM INVESTMENTS
Well one reason to stick with stocks over the long- term allows you to focus on the growth outlook of the business. Buying stocks for the long-term allows you to take advantage of compounding, or the ability to reinvest your profits ( dividends ) over time to generate even greater profit potential. Time is your greatest friend as an investor, and being able to reinvest a dividend can make a huge difference. Example: Pocketing a 3℅ yield will double your money about every 33 years, assuming no dividend or stock price growth. If reinvested back into more shares of the same stock, your investment will double in almost 10 fewer year's.
Another advantage of long-term investing is you will pay way less in taxes than if you're an active trader. Short-term traders, those that own their investments for 365 days or less pay tax at top marginal rate, up to 39.6℅. Long-term capital gains taxes are either 0%, 15%, or 20% at the highest, depending on your income. So holding your stock more than a year will save you money at tax time!
Another advantage of long-term investing is you will pay way less in taxes than if you're an active trader. Short-term traders, those that own their investments for 365 days or less pay tax at top marginal rate, up to 39.6℅. Long-term capital gains taxes are either 0%, 15%, or 20% at the highest, depending on your income. So holding your stock more than a year will save you money at tax time!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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julie : consents