Everything You Need to Know About Investing

To succeed with your money, you must make your money work for you. You sell your labor, which in return makes you money. By making each dollar work for you, this, in return, makes you wealthy over time. There are a plethora of investing opportunities out there. The key is determining the right one for your financial situation, The Know It Guy.

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Stocks

The most popular of all investment opportunities are stocks. Stocks are probably the main thing you think of when you hear of investing. When you buy a stock, you buy partial ownership of a company. Stocks range anywhere from $2 to $12,000, which can appeal to many people. To succeed when trading stocks, you must buy low and sell high. Of course, this isn’t easy, considering the market always fluctuates. You need to watch the company’s history and know the PE Ratio, the day range, the 52-week range, etc. Knowing this information can help you predict if the stock will go up or down. You can make a lot of money investing in stocks, which means you can also lose a lot of money. You want to remember that most investment in stocks is long-term. It is a hazardous investment, but if you properly research the company’s history, you can get an excellent return.

Stock Investing Tips

1.) Have the Right Expectations

When investing in stocks, you want to ensure you aren’t expecting to become Warren Buffet overnight. It just won’t happen. You want to do the proper amount of research and know the history of the market and the company you are investing in. When investing in stocks, the return is around 10%-13%. You don’t want to make hasty decisions and buy and sell a lot because you aren’t making the money you expected. Make sure you know how long you are keeping an investment, and then make a commitment. This will help you focus on the principles.

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2.) Don’t Listen to the Media

Don’t get caught up in what everyone is discussing and what is being said around you. It will take your decision from being based on research and history to just “hear-say.” This will hurt your investments immensely. Most of the hype and other things that are being said are just the market’s daily fluctuation.

3.) Stay Focused

You want to ensure you put all your effort and focus into your investments. Once you buy a stock, you own part of a company. Ensure you treat it the way it is, and do the proper research on all aspects of what you’re investing in. Doing your research can change your investment from making a profit of $15,000 to losing $15,000. Ultimately, it’s always worth it to do the extra work.

Mutual Funds

When you invest in Mutual Funds, you pool your money with several other investors. You then pay someone to manage and choose each security for you professionally. You can choose to invest in various mutual funds, which range to fit your investment strategy.
3 Types of Mutual Funds
1.) Open-Ended
2.) Unit Investment Trust
3.) Close-Ended

Mutual Fund Investing Tips

1.) Look at the Fees

Always look at the fees involved when investing in Mutual Funds. When you pay more for something, this usually means you will get a better product or service, right? Yes! It ensures you find the best deal but invest the right amount of money in the right places. It can change the course of the whole investment in the long run.

2.) Research the History

One thing you can do to prepare an investment is to check out the Mutual Fund’s history. Like anything, history shows how well it has performed and can be a good indicator. This can directly tell you if it will be a good investment, whether long-term or short-term. Another thing you want to look at is the asset of the fund. If it’s doing well and a community is investing in it, it can tell you if it’s a smart idea to support yourself. Always check the history of any investment before you decide to purchase.

3.) Look at the Contract

You never know what is involved until you take a detailed look at the prospectus provided by the fund. You want to ensure you know not just bits and pieces of what’s involved but everything there is to know and then some. Ensure you know all the fees involved with buying and selling funds and if international fees are required. Knowing this can help you determine if the company is a solid company where you can make money or get into something you regret.

Bank Investments

Bank accounts are one of the simplest forms of investment. Most banks give you a tiny percentage for opening a bank account and giving them your money. This percentage barely beats the rise of inflation, so you won’t be creating any wealth from this form of investment unless you keep hundreds of thousands of dollars in the bank. Another way to invest in your bank is a CD or Certificate of Deposit. A CD is very similar to a bank account, but they are usually for a fixed amount of time. They can be monthly, every six months, a year, etc. The CD is held until its maturity date and paid back with interest. A Certificate of Deposit usually earns more than an account at which you can withdraw the cash at any time, like a bank account.

Alternative Investments

Apart from the basic investments, there are other special securities. These investments include gold/silver, real estate, etc. These investments are speculative and can be very high profits. However, you need to know.

1.) Gold & Silver

The first thing you want to do before you invest in gold or silver is to look at the market and decide if now is the best time to invest in precious metals. You can also talk to a professional and choose the best time to buy and sell. You want to ensure you know various ways to invest in silver. You can invest in silver mining companies, ETFs, futures, bullion, and coins. You want to ensure the Exchange Traded Funds (ETF) are backed by physical gold and silver. Another thing to remember is not just owning a paper but also the actual precious metal.