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Different Types of Mutual Funds
This is a guide to the different types of mutual funds. When it comes to investing in mutual funds, investors have literally thousands of choices. Before you invest in any given fund, decide whether the investment strategy and risks of the fund...
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The 11 Best Money Saving Ideas of All Time - Part 4
At any time in history, no matter what the current state of the economy, no matter what the current trends, no matter what the unemployment rate is or where interest rates lurk, some money-saving ideas stay true. Some of you may have heard...
Why You Need To Buy and Sell Gold Coins (Part 1)
The Value of Gold in a Era of Paper Assets, Stocks, Bonds and Mutual Funds...
The facts behind the increasing demand for gold and silver, rare coins, and historic collectibles from the U.S. Mint...
No other substance on Earth embodies the...
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401(k) Plans
I’ve been in and interested in the stock market so long (one year shy of forty years) I can remember when the mutual fund pages in my home town paper were just one page! Now it looks like there are more mutual funds then there are stocks listed on...
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Where to invest your money
If you are new to investing, or even if you've been playing the market for a while, investment options can be overwhelming. Stocks, bonds, mutual funds. How do you pick the best place to invest your money? That's quite a decision!
Here are some tips that can help you get started:
If you are planning for a long-term investment, it may be wisest to go with stocks. History shows that stocks outperform other investing options over the long term. For example, from 1926 to 2004, the stock market had an average annual gain of 10.4%, compared with only 5.4% for bonds and even less for other forms of investing.
That said, stocks may not be such a good option for short-term investing. They tend to be more risky and can undergo severe losses. Unless you're planning to keep your money there for a long time, you might not want to weather the stress of the stock market's ups and downs. Overall, a company's earnings are going to be the biggest player in a stock's fluctuation.
If you're willing to take a little bit of risk with your investing-or a lot-you probably will notice a bigger payoff. Stocks, for example, are a riskier investment than bonds. But again, stocks tend to bring in a
much higher return. On the other hand, there is also the chance that your stock will dip and you may suffer a great loss. That's all part of the game.
If you're looking for a low-risk, surefire investment strategy, U.S. Treasury bonds may be the way to go. The government has a lot of power over these bonds. Because of this, investing in these bonds is generally considered risk-free. Keep in mind, however, that bonds don't do so well when interest rates rise. Conversely, when interest rates go down, bond prices rise. This is particularly true with long-term bonds.
To be safe, the best advice is to diversify your portfolio. If you practice investing in a number of different areas, you are least likely to lose it all. (Remember the Enron scandal? Don't make that mistake!) Some investments will go up, others will go down. But at least you can be pretty sure you won't lose it all. Chances are, with a little research, some self-education, and careful investing, you'll build your savings substantially. Happy investing!
Jeff Lakie is the founder of Investing Information a website providing information on Investing
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