There is a lot to know about
investing. It all depends on what type of investing you are interested
in as well. There are many different types of investment options out
there. So what is investing, specifically?
When you invest, you are
paying in a certain amount of money that you expect to grow with time.
Most investments are considered long term investments meaning you will
not get your money back right away but if you leave your money in, it
can multiply dramatically over time. Types of Investing: Real Estate
Investing, Bonds, Stock Investing, Mutual Funds, 401K. With stock
investing, many of the younger investors see the market as a way to get
rich quick. They are quick to sell off the stock that they have when it
goes up or if they see it go down a little, they get nervous and sell it
off. If they hold the investment and ride it out, they are much more
likely to see it grow.
If you are going to be investing, the key to success is asset
allocation. You need to vary your assets by investing in more than one
type. So just how do you do this exactly?
Well, you need to know what the 4 major
types are first.
(1) U.S. Stocks are one. They are represented by the S&P 500 Index
(2) Foreign Stocks is another; represented by EAFE Index (Europe,
Australia and Far East)
(3) Real estate, represented by the National Association of Real Estate
Investment Trusts Equity Index
(4) Commodities; represented by the Goldman Sachs.
The key to a growing portfolio is finding a balance between the ups and
downs of these many assets. For example, if one year stocks seem to be
down, real estate or commodities may be up. So if you are ready to get
started with investing, what do you need to know? First, you need to
decide how much money you have to invest safely.
If you decide to invest in mutual funds, you will be asked if you want a
high, medium or low risk stock. If you invest in high, there is of
course, more risk involved but if it is successful, you will see much
If you go with a low risk, you will
not lose as much if it doesn't work out but you will not gain large
amounts if it is successful. It's really all about how much money
you have and how much you feel comfortable with risking.
Whatever you choose, there is really no reason not to invest. There
are so many opportunities that can be tried with little investment
and little risk of loss. If you are considering it. It is easy to
learn a little more about it to form your decisions of which way to
go and then invest your money and watch it grow! The money you
invest may return money for your college, kid's college, retirement,
to buy a house or whatever your needs are. There's no reason not to
get started today.