Determining Which Investment Strategy Is Right For Me
There are so many different investment strategies and plans out there. How do I determine which investment strategy is right for me? Well, in order to answer that question for yourself, you need to consider how comfortable you would be with each of the strategies. Ultimately, it's not a matter of which strategy is best. Rather, it's about which strategy you like best.
Those are good things to ask. It's important to consider your strategy before you buy any stocks or bonds. Although different experts have different opinions about which strategies are best, the real question is not what the best strategy is, but what is best for you.
To determine that, you need to consider how comfortable you are with risk. In other words, how upset would you be if you lost it all? If you would be devastated, you need to choose a very conservative investment strategy. If it wouldn't bother you at all, you will be comfortable investing in anything, no matter how risky. But you should still use some common sense and research every company or opportunity before investing in it. Just because you're comfortable with risk doesn't mean you should throw your money away.
Most people will be somewhere in between these two extremes. They are willing to risk losing a little, but not a lot. For many of these people, a mutual fund is a great way to get started investing. By investing in a mutual fund, you are purchasing a tiny piece of many different companies. If some of those companies do poorly, or even fail, you still have a good chance at having your investment increase in value because other companies in the portfolio may be doing really well to make up for the ones that aren't.
Of course, if the stock market crashes, the value of any stocks you have bought are likely to drop, no matter how risky they were individually. It is important to remember that the stock market has a long history and has always bounced back up after every drop. Even the crash that precipitated the Great Depression did not permanently depress the stock market. It eventually recovered. If the stock market should fall after you've invested in it, your best bet is to wait it out. As long as you don't panic and sell low, you have a chance at regaining the value of your portfolio when the stock market goes back up.
There are some investments that are considered inherently safe, such as the certificates of deposits that banks sell and government bonds. Just remember that these investments usually have the lowest returns. You will do better to invest in stocks that have a better chance of having a good return as long as you are comfortable with the level of risk involved in the investment.
Although you are always taking a chance when you invest in the stock market, overall the US stock market has always done well over time. The trick is choosing individual stocks or mutual funds that are likely to do well. If you do your research before investing and stick with investments that fit with your investment personality, you can increase your chances of doing well in the stock market. - 23223
Those are good things to ask. It's important to consider your strategy before you buy any stocks or bonds. Although different experts have different opinions about which strategies are best, the real question is not what the best strategy is, but what is best for you.
To determine that, you need to consider how comfortable you are with risk. In other words, how upset would you be if you lost it all? If you would be devastated, you need to choose a very conservative investment strategy. If it wouldn't bother you at all, you will be comfortable investing in anything, no matter how risky. But you should still use some common sense and research every company or opportunity before investing in it. Just because you're comfortable with risk doesn't mean you should throw your money away.
Most people will be somewhere in between these two extremes. They are willing to risk losing a little, but not a lot. For many of these people, a mutual fund is a great way to get started investing. By investing in a mutual fund, you are purchasing a tiny piece of many different companies. If some of those companies do poorly, or even fail, you still have a good chance at having your investment increase in value because other companies in the portfolio may be doing really well to make up for the ones that aren't.
Of course, if the stock market crashes, the value of any stocks you have bought are likely to drop, no matter how risky they were individually. It is important to remember that the stock market has a long history and has always bounced back up after every drop. Even the crash that precipitated the Great Depression did not permanently depress the stock market. It eventually recovered. If the stock market should fall after you've invested in it, your best bet is to wait it out. As long as you don't panic and sell low, you have a chance at regaining the value of your portfolio when the stock market goes back up.
There are some investments that are considered inherently safe, such as the certificates of deposits that banks sell and government bonds. Just remember that these investments usually have the lowest returns. You will do better to invest in stocks that have a better chance of having a good return as long as you are comfortable with the level of risk involved in the investment.
Although you are always taking a chance when you invest in the stock market, overall the US stock market has always done well over time. The trick is choosing individual stocks or mutual funds that are likely to do well. If you do your research before investing and stick with investments that fit with your investment personality, you can increase your chances of doing well in the stock market. - 23223
About the Author:
Have you been searching for a solid investment strategy that works for you? Before you waste your time searching for a good strategy, check out BeforeYouInvest.com's beginners guide to investing before you do anything else. BeforeYouInvest.com reviews everything from common investment strategies to the best online investing tools so take a look.
posted by X - Men @ 5:34 AM
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