Tuesday, February 24, 2009

Is the Stock Market where I should Invest?

By Samantha Asher

Do you have any extra money? Do you wish your job paid more than what it does? If you really want to start making more money, start saving now so that you have the cash to invest. It can be done.

There are many different ways to invest money. Which should you choose? You can invest in stocks, bonds, mutual funds, commodities, derivatives, real estate, currency, money market funds, or you could lend it to your unstable cousin. Most of these will probably make you some money, but some will earn you more than others. Why should you choose to invest in the stock market over the other investments?

If you had to choose between stocks and bonds, you should choose stocks. Of course there are many variables here, but usually stocks will earn you more money. The average return of stocks throughout history is about 13%. That is very good.

Bonds and CDs, especially government bonds, aren't big earners. They don't get anywhere near the average of the stock market, unless you get into junk bonds. If you are willing to take the little extra risk, you can make a lot more in the stock market.

By diversifying your stocks you can minimize the extra risk they hold over bonds and CDs. Try investing in mutual funds. They will instantly diversify your money and minimize the loss you can get. With the right diversification, you can handle the risk of the stock market, especially if you have a lot of time to invest.

Stocks are also pretty easy to invest in. There isn't a lot you need to know. Unlike commodities or derivatives, you can learn all about stocks and really understand them without extensive research and education. Sure, you can understand derivatives, but stocks are much easier and can often earn more.

You probably don't even know what futures and options are. If you're not convinced it's easier than derivatives, that's fine because derivatives have to do with the stock market, too.

If you really want to make a lot of money, invest in the stock market. You can make a lot of money with minimal risk if done right and without complication. You can even get started as soon as you want. - 15790

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