Looking at what to invest in can be daunting at first, but so long as you listen to the right advice, you shouldn’t let it keep you awake at night. Indeed, as Mark Shipman points out in his EQ vs IQ course, if any investment is keeping you awake at night then you’re doing something wrong and should either close or reevaluate your position.
So, what to invest in? Here is a broad look at some of the options available to you.
There are several less-risky options if you are considering investing money for a future event such college for your children or retirement, If you are planning for a long-term investment, then there are many different investments that will show a decent return over time.
Bonds are one of the safest ways to invest. They are like purchasing CDs or Certificates of Deposit. However, bonds are issued by the government, not banks. Your investment could double over a specific period of time depending on the type of bonds in which you choose to invest, though obviously all the usual caveats apply – there are no guarantees.
Mutual funds are when a group of investors put their money together and buy bonds, stock, and other types of investments. If you find a qualified, reputable broker who can handle mutual funds and will invest them for you and decide on a fund manager who will decide how the money is invested, then you will be able to invest in mutual funds. They are a little riskier than bonds, but not as risky as the stock market. Again, it’s a question of whether you feel confident enough to take charge of your own destiny or leave it in the hands of others.
If your are looking for another type of long-term investment, then shares or stocks may be something to consider. When you purchase stock, you are purchasing part ownership of the company in which you are investing. If the company does well, then the stock goes up and you will make more money. On the other hand, if the company does not do so well, and it loses money in profits, then your stock value drops and you lose money, too. There are some reliable companies that have been around for a long time that you can invest in and your money will remain relatively safe, but it may not grow quickly. Using methods such as moving averages can help you successfully follow upward trends.
Looking at the choices, you may decide to invest in a little of each type listed above. Do considerable research when investing for the long-term gain. When choosing a stock, it is best to start with a business that is well-established. When deciding to invest in mutual funds, be sure that the broker has a good track record for past performance before handing your money over. If you are not sure you want to take a big investment risk in the stocks or mutual funds, then go with the government guaranteed bonds. It is not as fast and as big of a return, but you will get a return and you won’t be in as much danger of losing your investment.
Ultimately though, nothing can be better than learning how to invest properly yourself — arm yourself with the facts, model yourself and the experts and learn their techniques. Above all, develop the correct emotional mentality and never deviate from the rules — greed is a surefire way to lose, as is over-confidence.
But it really isn’t rocket science and it can be done simply and effectively.