Everything You Need to Know About Investing

To become successful with your money, you have to 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 to figure out which one is the right one for your financial situation, The Know It Guy.

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 a large variety of people. To be successful when trading stocks, you have to buy low and sell high. Of course, this isn’t easy, considering the market is always fluctuating. You need to watch the company’s history, 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 keep in mind that most investments in stocks are long term investments. It is a hazardous investment, but if you do the proper research of the company’s history, you can get an excellent return.

Stock Investing Tips

1.) Have the Right Expectations

When you invest in stocks, you want to make sure you aren’t expecting to become Warren Buffet overnight. It just won’t happen. You want to make sure you do the proper amount of research and make sure you 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 talking about 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 make sure you are putting 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 make sure you do the proper research of all aspects of what you’re investing in. Doing your research can change your investment of making a profit of $15,000 to losing $15,000. In the end, it’s always worth it to do the extra work.

Mutual Funds

When you invest in Mutual Funds, you are pooling your money with several other investors. You then pay someone to manage and choose each security for you professionally. There are various mutual funds you can choose to invest in, 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 that you are going to be getting a better product or service, right? Yes! It makes sure you find the best deal, but make sure you 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. Just 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 it be long term or short term. Another thing you want to look at is the asset of the fund. If it’s doing good and a community of people investing in it, it can tell you if it’s a smart idea to invest yourself. Always check the history of any investment before you decide to purchase.

3.) Look at the Contract

You never know what is all involved until you take a detailed look at the prospectus provided by the fund. You want to make sure you don’t just know 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 there are international fees required. Knowing this can help you determine if the company is a solid company where you can make money or get into something you will regret in the future.

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 are keeping 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 then held until its maturity date and paid back with interest. A Certificate of Deposit usually earns more money than an account at which you can withdrawal the money 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 decide when the best time to buy and sell would be. You want to make sure you are familiar with the variety of ways to invest in silver. You can invest in silver mining companies, silver ETF’s, silver futures, silver bullion, and also silver coins. You want to make sure the Exchange Traded Funds (ETF) are backed by physical gold and silver. Another thing to remember is not just owning a paper owning, but the actual precious metal as well.