Wednesday, September 23, 2009

Investment Line On Stock

       To fully understand stock and find the starting line to begin, you first must understand what investment means. To the average person a investment is putting what’s left in a savings account after paying all the monthly bills if anything is even left at all. That seems like a perfectly logical thing to do and before most people get the inside line on stock, this is great beginner investment.  But once a beginner starts to get a feel for the market, putting that left over line of income on stock is the way to go. Of course all stocks, on line trading, securities and bonds are a risk. I will tell you right now, whether it’s putting your savings on the line to buy stock, or investing in that brink and mortar business, all investment can be a risk. That is the nature of the beast. Even today your money sitting in your pocket is losing its worth to the future inflation, so even burying all your money in the ground will not keep it from getting robbed by inflation Putting your money in a bank can be safe by keeping it safe from theft, as the FDIC (Federal Deposit Insurance Corporation) will insure it for up to $250000 (it was raised by $150000 due to the economic failure of 2009). So whenever you weighting the risk of putting your money on the line always think about the evident and un seen risks.
    For a beginner putting your money on the line with stock, or money market funds, will pay out a little better or greater than options on deposits. A money market fund simply is a large pool of money thrown together by thousands of likeminded investors for beginners and pros to stock alike. Their money is used for many different types of investments, long and short term, that mature at different times. This insures there is always a cash flow for all the investors. Keep in mind though that all the earnings are subject to taxation and banking fees.
    So you may be asking yourself what other avenues are there for putting you money on the line for investments.  Well if you’re not into stock as a beginner real estate can give you a tangible product to invest in. Hey, and if things go bad you can always move in to it. Remember about the evident and unseen risk though. The house could burn down or the real estate market could go south leaving you holding the bag for years waiting to unload your investment. On top of that there is property taxes and home owner fees associated with it.
    Instead putting your money on the line with stock perhaps you would prefer gold or silver. That would give you something to hold in your hand and pass around a dinner parties. Seriously though gold and silver can make good investments like recently during the economic failure, but remember gold can depreciate too. A retail shop can be a good beginner investment over stock. They also come with the cost of product, employee cost, rent, taxes, licensing and other unseen cost like a leaky water pipe wiping out your product.
    For me though I put my money line on stock and bonds. I mean why wouldn’t a beginner put their money on the line with stock? That’s what the banks are doing. Whenever you lug your hard earn money down to the bank, they turn around and put it into stocks and other investments with money markets. Even insurance companies are doing it. So while they are paying you the little percentage on interest, they are out putting your hard earned money on line buying stocks and investments. They are making way more than your interest rate.  They do this because it has be proven that over the years stocks are safer and pay more in the long run. That’s why the banks have a money line on stock. So you may be asking yourself as a beginner why you aren’t.

1 comment:

Anonymous said...

I was wondering this stuff. I want to become a investor one day but im a bit of a beginner. I'll follow along to learn more about stock