Thursday, February 21, 2013

Investment Strategies For Beginners

In today's economy, many people are searching for methods in which to invest their money and have it working for them, instead of them working for money. Home based business and corporate downsizing seem to be the norm, and many people are starting to realize that government and company pensions might not be there in the future. Fortunately there are a few methods to ensure that you retire in comfort. Investing for beginners doesn't have to be complicated. 

Real estate is an investing option, but it can be expensive, and requires a hefty down payment of atleast 10% of the buy price. If you have tenants, you could be in a for a bumpy ride if you need to evict them, or they keep calling to report problems with the furnace, plumbing, air conditions, etc. Fixing up a property or flipping can also get quite expensive and not give you the return you're looking for.

Stocks offer a much more viable investment, as it doesn’t require a lot of capital, and if you choose wisely, can offer you a stable and predictable income. You can choose to hire a stockbroker to make informed choices for you, or you can choose to make your own stock choices. If you hire someone, be aware that they will take a fee out of your profits.
Choosing your own stocks is a better option in the long run. It may seem a bit overwhelming at first, but with some education and knowledge, nearly anyone can become successful at stock and options investing.

If your investing knowledge is limited, it’s best to buy some books for beginners, written by successful investors. There are many how-to books on the subject by some of the world’s best investors, such as Derek Foster, Warren Buffet and Peter Lynch. Their books include strategies and tips on how to make smart investing decisions. They are also simple to read and know.

Do some online research on your own to check out some companies you may be interested in. Learn all you can about what they do, their earnings, their customers, etc. If you can’t find the information on their website, contact them and question them directly.

Once you have some companies in mind to invest in, you can paper trade or use ‘fake’ money. This simply means that you are going to keep track of the stock without using any real funds. You can do this on paper, but it is better to open a trial account online to keep track of them. There is absolutely no risk, as you aren’t using your own money. You will get a better thought of how the stock market works and you will gain some tips and knowledge on how to choose your stocks wisely.

Now that you have a excellent thought of how to trade, what companies to look for and how you make money, you are ready to invest with your own funds. If you are still a bit nervous, start with a small amount until you become more comfortable with the process. Soon you will have a diverse portfolio and you will be at ease knowing your retirement fund is growing. Investment for beginners is not that hard at all.