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Starting Your Investing Program
by Stanley Broughton
http://www.swsinvesting.com
Beginning investing can be a confusing and overwhelming
process, with many different options available to you.
What~s the best option to invest your money ~ a high
interest savings account, a mutual fund, or perhaps
technology stocks? There are almost endless options;
without the assistance of a trusted financial advisor you
could end up investing in the wrong stocks. If you are a
first time investor, you may prefer starting with low risk
investments options such as mutual funds. Generally, lower
risk also means greater chance of a small return. Still,
it~s important to remember that everyone needs to begin
somewhere.
When you are ready to invest you should first
determine if you have any high interest debt such as
credit card debt. If you do, pay it off before you start
investing your money. The return you get from your
investment will probably not even come close to what
you are paying in interest. Once that is dealt with, you
should decide what you want to get out of your
investments.
If you are dreaming of the perfect investment a new company
which will let you sit back and watch your money double or
triple, don~t count on it. In unusual circumstances, it is
possible, but usually with high risk. When planning your
first investments, you want to play it safe and smart.
Don~t risk your money trying to live a pipe dream. Remember
that what goes up must come down, even stocks.
Because of the volatile nature of the stock market, you
should ask yourself if you can deal the sometimes
stressful fluctuations. Many people will panic if a stock
goes down and sell as quickly as they can, only to see
the stock rise shortly thereafter and exceed the value it
was at before they sold it. You need to be able to
detach yourself from the situation and objectively
decide what makes sense. Start off with a small
investment in stocks to determine if you can deal with
the risk involved.
Another thing to consider is whether you want a short term
or long term investment. You can easily determine this by
asking yourself if you will need the invested money in the
next five to ten years. If you do anticipate needing the
money in the near future, stocks, bonds, or mutual funds
may not be the best choice. When investing in one of these
mediums, you usually have to leave the investment for quite
a number of years. If you will want access to your money
in the next few years, think about a high interest savings
account, certificates of deposit, or money market funds.
Investing can be a very daunting process for many
people, especially if you don~t know what options are
out there. Be sure to research and really think about
your investments before signing your money over.
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