Handling for Beginning Traders
How would investments be possible if you're barely making good savings? Say you're making around $25,000 annually. Between feeding yourself, paying for your mortgages, your gas money and other expenses, you know that you have to start investing for your future. It's a good idea to start doing so; because even in small amounts, savings can add up surprisingly fast if done regularly.
Don't worry about it, Uncle Sam is here and willing to help a citizen of his country. For example, take the statistics over the past ten years. Annually, the stock market returned about eight percent on average, so even if you start with absolutely nothing and invest about ten dollars every week, and match an investment with about eight percent return, you'll have about $8000 in ten years. If you got a better investment, one that goes for about twelve percent in annual returns, you'll even get to ten thousand.
There is one big thing to remember, though; investing with small amounts of money does not mean you put it all in one horse. Any stock investor, regardless of talent, will eventually pick a bad investment that will drop by about thirty percent right before your morning coffee the next day. If that's only a small fraction of your stocks, then it's not so bad. But it would be a financial disaster if that's about a fifth of your money.
So, as a small-time investor, it would make more sense to go for mutual funds and exchange-traded funds. Why is that? Well, for starters, mutual funds provide automatic diversification. As most hold dozens of stocks, one of them failing will have minimal impact on the portfolio.
Oh, and one last thing; these funds must be purchased directly from a fund company. Purchasing them through stockbrokers won't work if you're still a small-time investor, as most will ask for a hefty check to open accounts. It's not a big problem, however, and it can be overcome easily. - 23217
Don't worry about it, Uncle Sam is here and willing to help a citizen of his country. For example, take the statistics over the past ten years. Annually, the stock market returned about eight percent on average, so even if you start with absolutely nothing and invest about ten dollars every week, and match an investment with about eight percent return, you'll have about $8000 in ten years. If you got a better investment, one that goes for about twelve percent in annual returns, you'll even get to ten thousand.
There is one big thing to remember, though; investing with small amounts of money does not mean you put it all in one horse. Any stock investor, regardless of talent, will eventually pick a bad investment that will drop by about thirty percent right before your morning coffee the next day. If that's only a small fraction of your stocks, then it's not so bad. But it would be a financial disaster if that's about a fifth of your money.
So, as a small-time investor, it would make more sense to go for mutual funds and exchange-traded funds. Why is that? Well, for starters, mutual funds provide automatic diversification. As most hold dozens of stocks, one of them failing will have minimal impact on the portfolio.
Oh, and one last thing; these funds must be purchased directly from a fund company. Purchasing them through stockbrokers won't work if you're still a small-time investor, as most will ask for a hefty check to open accounts. It's not a big problem, however, and it can be overcome easily. - 23217
About the Author:
Rick Amorey does not advice you to go for get-rich-quick schemes that are rampant on the Internet! With the help of Emini Trading, you will learn a disciplined, solid methodology that will get you to consistently earn more and more with trading. Be a part of the Emini Trading System now!
posted by X - Men @ 2:45 AM
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