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Investing for Beginners
by Stanley Broughton
http://www.swsinvesting.com
If you are ready to start investing, you are probably
feeling overwhelmed at all the different options
available to you. Should you invest your money in a
high interest savings account, or perhaps a lucrative
technology stock? The choices seem endless, and
without the help of a trusted financial advisor, you may
end up investing in the wrong thing. If you are
investing for the first time, you may want to start off
with a low risk investment such as mutual funds. Keep
in mind that low risk usually means less chance of
getting a large return, but just remember that everyone
needs to start somewhere.
When you are ready to invest you should first
determine if you have any high interest debt such as
credit card debt. If you do, pay it off before you start
investing your money. The return you get from your
investment will probably not even come close to what
you are paying in interest. Once that is dealt with, you
should decide what you want to get out of your
investments.
You may be dreaming of the perfect investment in the
stocks of a new company where you can sit back and
watch your money double, triple, etc. Don~t count on
this happening. It is possible, but for your first
investments, you want to be smart. Don~t lose all your
money trying to live a pipe dream. As fast as stocks go
up they can come down.
The stock market is volatile in nature. Be sure that you
can deal the sometimes stressful fluctuations of the
market. Some people panic when stocks go down and jump to
sell as quickly as they can, only to see the stock rise
shortly thereafter and exceed the value it was before
selling the stock. You need a certain amount of detachment
from the situation to make objective decisions. Start off
with small investments in stocks and decide if you can
handle the risk involved.
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 is serious business and can make a lot of people
nervous. If you plan to try it, do plenty of research and
carefully consider the various options.
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