Investing: The Art Of Making Your Money Work For You
There is a lot to know about investing. It all depends onwhat type of investing you are interested in as well. Thereare many different types of investment options out there. Sowhat is investing, specifically?
When you invest, you are paying in a certain amount of moneythat you expect to grow with time. Most investments areconsidered long term investments meaning you will not getyour 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 investorssee the market as a way to get rich quick. They are quickto sell off the stock that they have when it goes up or ifthey see it go down a little, they get nervous and sell itoff. If they hold the investment and ride it out, they aremuch more likely to see it grow.
If you are going to be investing, the key to success isasset allocation. You need to vary your assets byinvesting in more than one type. So just how do you do thisexactly? Well, you need to know what the 4 major types arefirst.
(1) U.S. Stocks are one. They are represented by the S&P 500Index (2) Foreign Stocks is another; represented by EAFEIndex (Europe, Australia and Far East) (3) Real estate,represented by the National Association of Real EstateInvestment Trusts Equity Index (4) Commodities;representedby the Goldman Sachs.
The key to a growing portfolio is finding a balancebetween the ups and downs of these many assets. Forexample, if one year stocks seem to be down, real estate orcommodities may be up. So if you are ready to get startedwith investing, what do you need to know? First, you need todecide how much money you have to invest safely.
If you decide to invest in mutual funds, you will be askedif you want a high, medium or low risk stock. If you investin high, there is of course, more risk involved but if it issuccessful, you will see much higher returns. If you go witha low risk, you will not lose as much if it doesn't workout but you will not gain large amounts if it is successful.It's really all about how much money you have and how muchyou feel comfortable with risking.
Whatever you choose, there is really no reason not toinvest. There are so many opportunities that can be triedwith little investment and little risk of loss. If you areconsidering it,it is easy to learn a little more about it toform your decisions of which way to go and then invest yourmoney and watch it grow! The money you invest may returnmoney for your college, kid's college, retirement, to buy ahouse or whatever your needs are. There's no reason not toget started today.
The author has discovered that wealthy people have a different thought process around money and finances. She has been helping people to achieve their financial goals for over 10 years.
Margaret Marabella is founder of Fun Investing an excellent resource site dedicated to information on investing
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