That really is what investing is – putting aside money now that will grow into a nest egg for your future use. This article will review the options you have for buying an asset and the potential pitfalls and promises of each type of investment. I am sure you are all to well familiar by now that every investment can be a roller coaster ride that can be pretty scary. Whether it be a piece of a company you own or other asset such as stock, real estate, bonds, or a small business there are no guarantees — that’s why you need to review the risk and reward for each option to find one that suits your investment demeanor.
One of the main steps you need to take in any investment vehicle is to diversify. That way you are never dependent upon one section of the economy or area of investment and you can spread your risk around to give you an overall better return than in a straight bank account.
The Stock Market
Many of you used to see the stock market as the place to invest in. Well now may be the best time to invest in a long while. The market has stabilized and appears to be on the way to a long term uptrend — maybe the start of another bull market — we will have to wait and see.
Stocks represent ownership in a company. You share in the growth and profits of companies. You can do your research and simply buy shares of the stock form a brokerage firm. Your investment value will trend up and down along with the respective companies balance sheet.
You don’t need an advanced degree to make money in the stock market. All you need to do is make regular investments in solid main stream companies and you will come out ahead. The stock market, long term, is one of the best places to invest for return on your money. If you try to time the markets as some people do you will probably end up a net loser. You will be competing against professionals with automated computer programs that will put you at a disadvantage.
The small guy has an advantage over the large investment firms in that he/she can move in and out of the market quickly when necessary.