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Is it advisable to hold stocks?

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Anonymous

12y ago
Updated: 8/20/2019

by drinkin water

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12y ago

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To earn compound interest on stocks, you can reinvest the dividends you receive back into the stock, allowing your investment to grow over time. Additionally, you can hold onto your stocks for the long term to benefit from the compounding effect of reinvested dividends and potential stock price appreciation.


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A business may decide to hold buffer stocks to ensure that it can meet unexpected demand fluctuations or supply chain disruptions without delays. Buffer stocks help maintain consistent production levels and customer satisfaction by preventing stockouts. Additionally, they can mitigate the risks associated with price volatility and lead times, allowing for more stable financial planning and operational efficiency. Overall, buffer stocks serve as a strategic tool for managing uncertainties in the market.


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