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Investing for Beginners
by Stanley Broughton
http://www.swsinvesting.com
Investing money is a popular thing to do but if you~re new
to it, you may find yourself confused in a very short time.
There are so many things to check into that it could set
your head spinning. Technology stocks are tempting in this
day and age, but maybe a high interest savings account is a
better idea. If you~re inexperienced it~s a good idea to
hire an advisor until you at least understand the basics.
It~s tempting to take risks but much safer to start of with
a mutual fund or some other low risk opportunity. It~s true
the return may be less, but it~s smarter to play it safe.
One of the first things you should do before investing is
pay off any high interest debt you have. What you make on
your initial investment will be much less than what you~re
paying out so take care of it; then start thinking about
investments.
If you are dreaming of the perfect investment a new company
which will let you sit back and watch your money double or
triple, don~t count on it. In unusual circumstances, it is
possible, but usually with high risk. When planning your
first investments, you want to play it safe and smart.
Don~t risk your money trying to live a pipe dream. Remember
that what goes up must come down, even stocks.
Before you try the stock market you should be familiar with
how well you handle stress. The market isn~t stable and you
have to be ready for constant change. If you tend to panic
and fear you might sell a stock the minute it starts
slipping, then you probably aren~t a good candidate for
this type of investment. A stock can go down one day and
back up the next. You must be able to step away from the
situation and remain impartial while you let your money
ride. Make a small stock investment and see how well you do
emotionally.
You should also consider if you want a short term or
long term investment. The easiest way to determine
this is to ask yourself if you will need the investment
money in the next five to ten years. If you do foresee
needing the money, stocks, bonds, or mutual funds
aren~t the best choice. To get a good return from your
investment you should leave it in one of these mediums
for quite a number of years. If you need your money in
the next few years, consider high interest savings
accounts, certificates of deposit, or money market
funds.
Investing can be a very daunting process for many
people, especially if you don~t know what options are
out there. Be sure to research and really think about
your investments before signing your money over.
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