Chris Holden

I'm Chris, and This is My Blog

The Art of Investing Wisely

by Chris Holden - July 14th, 2015.
Filed under: Be Wise With Your Money, Success.

Investing can be a frustrating thing is one does not know what to invest in. There are a lot of things in the world that a person can put their money into, but it is always going to be better to look at all the opportunities that are available before any investing is done.

It starts with the 401K for anyone that has a job that offers this. Some people overlook what the 401K can do and fail to really look at what this plan provides. In many cases the company will match the investment up to a certain percentage. Employees must take advantage of this because those that fail to do so are giving up free money that is offered by the employer. When a 401K plan is chosen it is up to the investor to decide if they are planning to go moderate or risky with their investment choices. The younger investor that is under 30 can take the risk because they will have more time to recover even if their risky portfolio doesn’t provide the return they desired. An older person, on the other hand, will have to consider an investment that is more moderate because they cannot afford to lose a lot of money with the high risk investments.

This same principle that is used to measure investing with the 401K should also be implemented with mutual funds or stocks investments. When people make investments in mutual funds they are naturally playing it safer than a person that invests in stocks, but there is still some level of risk involved. With mutual funds this is a great go-between for those that are tired of the dismal rates from certificates of deposit but not quite ready to invest in stocks. A mutual fund may provide a return on investment that is 4 or 5 times more than a CD, but it may only be half the return on investment that stocks may bring. That is why some people choose to take the risk and earn more with the stocks.

It isn’t always a guarantee that a group of stocks will provide large sums of money to those that invest, just ask Brazilian finance wiz Igor Cornelsen. That is why it makes sense to spread out investments. It may seem like the golden egg of investments lies in technology stocks, but every stock – at some point in time – experiences a downward spiral. That is why a diverse portfolio is going to make more logical sense. There are people that are interested in investing in stocks like the S&P 500. This is a collection of different stocks. It allows a person that is unsure of what to invest in to build a diverse portfolio.

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