Investing in the stock market is really the only way to preserve and grow wealth over long periods of time. Retirement investing – typically in a 401k account – should be done in a set of mutual funds that include mostly stocks while you are young and then gradually include more bonds and fixed income assets as you approach retirement age. There is much to be said, however, for owning individual stocks as well in an investment portfolio separate from your retirement savings.
It is true that individual stocks are more risky than mutual funds. While the market as a whole tends to go upward over a period of time, individual stocks can lag or decline. Sometimes a company will even go out of business entirely. Still, buy the right stock and you can retire early on the profits. Think of buying Home Depot or Microsoft in the 1980’s and then…
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