How To Choose The Best Investment For You
Still feeling nervous about the stock market? Have you remained on the sidelines, trying to figure out what's the best investment to be in right now? Here are ways you can choose the best investments appropriate for your personal portfolio. (The ideas listed below are to help you consider alternatives - but are not recommendations. Make your investing decisions based on your financial goals and risk tolerance.)
Stocks: Gone is the buy and hold mentality from stock investing, since last year's downturn. This doesn't mean yo shouldn't buy stocks, just don't expect to buy them and do nothing else for fifteen years while they grow into wealth. With the economy still a bit shaky, keep watch over your investments to make sure they're performing as you need them to. Choose large, brand name companies, the ones that perform well regardless of the market, because consumers love them, or their products are the ones we can't do without. Focus on companies with strong balance sheets, meaning low debt, good revenue and cash flow.
Bonds: Bonds may be more safe than stocks, but they have risks too. Returns are based on a company's ability to repay debt, so if a company goes bankrupt, the bondholders are negatively impacted. If you're thinking about Treasury bills or bonds, note that today yields are very low. Even if you have a measure of safety, you will get lower returns as a result. Check into tax free municipal bonds, government agency and utility bonds, and highly rated corporate bonds. Select bonds issued by strong, healthy companies, or stick with government agencies.
Money Market accounts and CDs: The rates on these investments are very low, as these operate similar to a savings account. Usually these accounts are insured, but not always (check with the bank to find out). They are very safe investments, but have low returns as a result. These might be the best investment for someone nearing retirement, or a parent who is about to pay for college in the next year or two. These are also a place to keep some percentage of your money while looking for other investment opportunities.
Any investment should be based on your own, personal investment strategy. No financial planner, friend, blog or anyone else can tell you what the best investment is for you. Take the time to determine what your long term strategy is first, and your best investment choices will be those that help you reach those goals. - 23212
Stocks: Gone is the buy and hold mentality from stock investing, since last year's downturn. This doesn't mean yo shouldn't buy stocks, just don't expect to buy them and do nothing else for fifteen years while they grow into wealth. With the economy still a bit shaky, keep watch over your investments to make sure they're performing as you need them to. Choose large, brand name companies, the ones that perform well regardless of the market, because consumers love them, or their products are the ones we can't do without. Focus on companies with strong balance sheets, meaning low debt, good revenue and cash flow.
Bonds: Bonds may be more safe than stocks, but they have risks too. Returns are based on a company's ability to repay debt, so if a company goes bankrupt, the bondholders are negatively impacted. If you're thinking about Treasury bills or bonds, note that today yields are very low. Even if you have a measure of safety, you will get lower returns as a result. Check into tax free municipal bonds, government agency and utility bonds, and highly rated corporate bonds. Select bonds issued by strong, healthy companies, or stick with government agencies.
Money Market accounts and CDs: The rates on these investments are very low, as these operate similar to a savings account. Usually these accounts are insured, but not always (check with the bank to find out). They are very safe investments, but have low returns as a result. These might be the best investment for someone nearing retirement, or a parent who is about to pay for college in the next year or two. These are also a place to keep some percentage of your money while looking for other investment opportunities.
Any investment should be based on your own, personal investment strategy. No financial planner, friend, blog or anyone else can tell you what the best investment is for you. Take the time to determine what your long term strategy is first, and your best investment choices will be those that help you reach those goals. - 23212
About the Author:
If you find it's time to really learn to invest money, read more of Sue Calhoun's writing and reviews of investing advice at her blog, SavingCashTips.com.
posted by X - Men @ 3:44 AM
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