Stocks are considered an essential part of a well-thought-out investment portfolio. By owning stocks of companies in various sectors, you can build savings, safeguard your money from inflation, and maximize the income that you get from your investments. But like other investments out there, investing in stocks has some advantages and disadvantages. 

Here are three key benefits of investing your money in the stock market.

1. Capital gains

One of the main benefits of stock investments is the fact that stocks gain in value with the passage of time. On a daily basis, the prices go up and down, but the percentage growth that is registered after some time is huge. Especially if you invest in the shares of big companies that are properly managed and that generate a good amount of profits, you can benefit immensely through the price increase of your shares. What’s fascinating about capital gains is that they’re not taxable. However, it’s advisable that you buy a diversified portfolio so that in case one or two experiences negative growth, you will still make a profit from your stock investment.

2. Dividend income

A dividend is some form of passive income that results from the shares that you hold in an operating business. At year’s end, the shareholders get some part of the profits when they are declared. This offers an additional line of income, even when the value of the initial stock is not growing fast, because profit and the value of stock may not always go hand in hand. With the dividend income that you receive from your investment, you can fund your retirement or use the new line of income to grow your investment portfolio over time.

3. Diversification

The stock market offers a lot of diversification. This is because there are various investment products that you can put your money into. The value of stocks changes, notwithstanding other kinds of investments, and this can be beneficial to the holder in the long run. For investors who have a high appetite for taking risks, stocks provide the best avenue for that kind of investment. For instance, there are some shrewd investors who may choose to go for the stocks of small and lesser-known companies, which have a huge potential for growth. Within a short time, and with some luck, a lot of appreciation in the share prices occurs, and they hit a jackpot.

Which stocks should you invest in?

The American Leisure Holdings Inc, popularly known as AMLH is a top choice for investors seeking a company that has a growth potential. In recent times, the company’s stock has experienced a steady growth and it promises better returns for investors. Further, AMLH stock is fairly priced, and the company has recorded profits steadily. That means that an investor is assured of dividends every year, in addition to the capital gains that occur due to increase in prices of the stocks.