You’ve probably clicked this article because you’re interested in investing. But, you haven’t got much knowledge on the subject. Have no fear, the beginner’s guide to investing is here:
What Does Investing Mean?
Investing is when you put money into something with the hope of financial gain. The whole purpose of investing is to make a profit. Otherwise, it’s pointless and a waste of time. The basic mantra of any form of investment is to buy low and sell high. You can spend months/years waiting for your investment to grow in price, or it could be a few hours. It all depends on what you invest in.
What Should You Invest In?
Naturally, you need to find something to invest in before you start throwing your money around. There are tonnes of things that one can invest in nowadays. When you hear the word ‘investment’ your mind probably drifts to the stock market. And yes, investing in stocks is one way that you can spend your money. You buy shares in company stocks and sell them when they increase in price. It’s a popular investment method because, if done correctly, you can make lots of money in a short space of time.
However, it’s not the only way to invest your money. Investing in real estate is also a popular choice. There’s a lot of money to be made in the housing market. But, there’s a lot of money at stake too. Buying a house will cost you loads. Another thing you can put your money into is gold & silver. Many people will spend money on gold bars and keep them until a time when the value increases. But, as you can see here http://atkinsonsbullion.com/silver/silver-coins, you can also invest in silver coins. Silver, of course, costs less than gold.
So, take a look at your options and pick an investment that suits you best.
How Do You Invest?
There are a few ways in which you can invest in something. Firstly, you can do everything by yourself. You can find out what to invest in and then go about spending your money. This could be very difficult, especially for beginners. So, an alternative is to hire a broker to help you invest. A broker is someone that will buy and sell things for you. They’ll have a vast knowledge of whatever market you’re investing in. Of course, they cost money to hire, but they may be able to make you a fortune. See this article for a more indepth look at what a broker does: http://www.dummies.com/.
The final way you can invest is to go into a partnership with someone. Join forces and combine your money to start making investments. You and your partner can do this on your own, or get a broker. Investing as a partner means you won’t have to spend as much of your money. However, you won’t get as much back as the profits will be split.
Hopefully, you now know a bit more about investing. Trust me, investing is a great way to spend your hard earned cash. Don’t leave it sitting in a savings account, put it in something useful.
Guide for Investment Planning
Investment is subject to the need or want and it come regardless of the age group and gender. Money is a fundamental thing to manage and if you can do it with an ease your half job is done in securing your future. Savings are essential and not everyone is master in reserving fund or investing for the better tomorrow. Here future is not confined with you as an individual but the whole as a family. Relying on someone to give a better tomorrow is making fool of you.
It is easier to think of an investment than making it happen practically. Many cannot plan their funds even if they have most of it. Plan your saving, how much to save and then where to invest. Identify your need and objective and then work on the saving part. Track your saving and identify the investment plan you would want to choose for achieving the goal. Always plan a goal based investment depending on the need be it marriage, your children’s higher education, buying second home or retirement plan. Look for a better return on investment along with the monthly or quarterly interest.
Follow the basic 3 step for a right investment plan:
Set a need based goal
Being pragmatic is no harm and setting a realistic and achievable goal is important when you choose any plan for investment. Analyse your wants or desire, put a time frame to achieve and to what level the amount will be invested, and wrong decision may pinch your pocket.
Do your maths for per month saving
Check the income and source that you make many from. If there is fluctuation in the source of income it is better to be safe and investment an average amount than the whole and regret. Calculate the amount you want to be saved and achieve a lump sum in future and draw a chart accordingly.
Choose a right strategy and execute
After you finalise the plan meeting your need and goal, since it’s a long term goal you could choose a high risk investments and for short term low risk investments. Keep the track of the maturity of your investment.
Look for an investment plan and choose a plan to meet your need, multiple options are available in the market as desired. Check if the investment plans are flexible to be changed under any circumstances and play safe in the market. Few factors to be looked while investments are financial situation, period, risk craving and position of tax.
Myths about Investing and the Truth Behind Them
Despite hearing about the necessity of and benefits of investing, many people do not put any of their money in stocks and bonds as a part of their investment portfolio. In most cases, this is because they believe one or more of the various myths that surround the stock market. However, investing in a company is beneficial if you separate myth from fact.
Myth: Starting a Stock Portfolio Is Too Hard
When asked why they haven’t invested in stocks and bonds, many people answer that it seems too hard to do. In reality, creating a stock portfolio is easy, especially now. Not only are more companies working with people who wish to invest smaller amounts of money, but you can also try it on your own via online websites. You don’t have to be an expert in managing money, especially when working with a professional who trades for a living.
Myth: Only Rich People Have Stocks and Bonds Portfolios
Thanks to movies and TV shows, a lot of people assume you have to be rich to have investments in the stock market. This may have been true decades ago, but you no longer need the thousands of dollars. Today, most people can begin creating a solid investment portfolio with just a couple of hundred dollars.
A mutual fund allows a new investor to have money in several types of investments at once. However, if you go this route, it’s important to look at the transaction fees. Depending on how much they are, it may be more lucrative to wait until you have a larger sum to invest instead of investing each time you have a small amount of money.
Myth: The System Is Rigged Against You
Some naysayers avoid investing because they incorrectly assume it is just like gambling and that the system will be rigged against them. There’s an important difference, though. Gambling was created with the idea of winning because other people are losing, but investing focuses only on your money and is completely independent of what anyone else invests.Additionally, purchasing stocks is a straightforward and transparent process as long as you work with a reputable firm. If your firm doesn’t explain things to you, find a new one.
Moreover, it is important to keep in mind that stocks and bonds work in cycles. While it’s true that sometimes there will be downs, it’s also important to remember that it will very likely cycle back to an average return. If you sell as soon as it crashes, you’ll lose money you otherwise would have gotten back when the market cycled back up.
Myth: You Have to Invest in Dozens of Companies
This is another myth that seems to carry over from gambling. Just like people mistakenly believe they are more likely to win at slots if they bet all 20 lines, they also believe they’re more likely to “win big” if they invest in many companies, usually in industries they know nothing about. In reality, a solid portfolio will consist of several investments, but they should be in companies and industries in which the investor is familiar.
For example, someone who knows a lot about technology but nothing about sports probably wouldn’t want to invest in a cricket equipment company. On the other hand, a foodie with no knowledge of women’s fashion trends should probably stick to restaurants and other food-related companies.
Myth: You Should Invest in Only One Company
Some people do the exact opposite of investing in too many companies by investing in too few. The stock market is a place where the old saying “don’t put all your eggs in one basket” truly applies. Any investor who offers a guide to high touch personal service will tell new investors to put their money in more than one “basket.”
Myth: Past Performance Indicates Future Performance
A large number of new investors assume that just because a company’s stock has done well for a few months—or even for a year or two—it will continue to do so, but a company’s past performance has nothing to do with how well it will do in the future. Even a company that has done solidly for many years can have an unprecedented incident that crashes its value.
Investing your money in stocks and bonds is a worthwhile way to create wealth for you and your family when done correctly. Whether you choose to go it on your own or hire an investment firm to help you, be sure to keep the reality of these myths in mind as you get started.