You know you should invest your money, but what securities should you buy? The investments you choose have a great effect on how much money you will earn. Choose wisely and reap the reward.
First, let’s look at the basics. If you are new to investing and don’t know much, there’s really no reason why you should be investing in anything other than stocks and bonds. Real estate is another one you may know about and be interested in, be we aren’t going to talk about it here.
Should you Invest in Stocks?
Stocks are probably one of the most common investments out there, though not necessarily the most used. Even if you know nothing about investing, you’ve probably heard of stocks. Stock buying is ideal for those who are far from retirement and still great as you get closer to retirement. Buying stocks is a little riskier, but if you have a long time to build wealth, you can take that risk and will earn more over time.
Should you Invest in Bonds?
Bonds are another common investment. You might have savings bonds that you’ve received from family over the years. Bonds are usually less risky and are better to invest in when you near retirement. Keep an eye on the rating of the bond become low rated bonds can be just as risky or riskier than stocks.
Should you Invest in Commodities, Currency, Derivatives, etc.?
These types of investments are more for the advanced investor. If you don’t know what they are, you shouldn’t invest in them. Can you make more money with them than other investments? Maybe, but maybe not. Just like all other investments, they are a risk and you are taking a chance that you might lose money, or you might make money. You have to take that risk.
If you are brand new to investing, while you learn, you should consider investing in mutual funds. They are a great way to be invested in the stock market, bonds, or whatever investment you are interested in while not having to research yourself. Later, when you are more knowledgable, you can take the new information you learn to try new things in your investing.