Investing: How and where
to invest
If you want to invest, you have a
huge amount of opportunities here in the states and abroad. In the U.S. alone
there are more than 9,000 stocks, 10,000 mutual funds and millions of bonds both
corporate and government to choose from. You can work with one of the more than
thousands of brokerage firms, banks or financial advisers. You can even choose
to invest directly with the company or the government.
There are 3 basic investment types:
stocks, bonds and cash instruments.
- Stocks are part ownership you buy in a corporation (such as
McDonald).
- Bonds are loans you make to corporations and governments.
- Cash investments include bank accounts, Certificate of
Deposits (CDs) and short term U.S. Treasury bills.
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You can choose to invest directly in any or all of the three, or indirectly, by
buying mutual funds that pool your money with other people's money and then
invest it. Stock mutual funds, for example, buy stocks, while bond funds invest
in bonds. If you don't have the time nor expertise, mutual funds are the best
way to go.
Most financial experts will tell you
that these three basic investments should be the core of any investment
portfolio. But there are other types of investments as well, like gold, real
estate, or futures and options. If you're looking to diversify or just looking
for variety or can afford to take added risks, these may be for you. It's
important to note that these are not for the faint of heart, with futures and
options you may lose all of your investments. So before you invest in any one of
these investment options or any other type of investments, learn all you can
about the subjects to help you understand the risks and rewards for each.
Why Bother Investing?
Obviously, everybody wants more money. It's pretty easy to
understand that people invest because they want to increase their personal
freedom, sense of security, and ability to afford the things they want in life.
However, investing is becoming less of an extra thing to do and more of a
necessity. The days when everyone worked the same job for 30 years and then
retired to a nice fat pension are gone. For the average person, investing is not
so much a helpful tool as the only way they can retire and maintain their
present lifestyle.
Whether you live in the United States, Canada, or pretty much any other country
in the industrialized western world, governments are tightening their belts.
Almost without exception, the responsibility of planning for retirement is
shifting away from the state and towards the individual. There is much debate
over how safe our old-age pension programs will be over the next 20, 30, and 50
years. But why leave it to chance? By planning ahead you can ensure financial
stability during your retirement.
Related Article:
Things
you need to do BEFORE investing your money
Next -->>
How to choose the best investment
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