Investment Guide to Investing For Beginners

In this difficult investment environment and messed-up economy, you need the best investment guide possible. To navigate the turbulent waters ahead, you’ll need a guide for investing beginners. Investing is easier than ever. You are now ready to learn how you can invest. Here’s how.

You’ll first need to understand the investment universe, including any investments that you may already have. It’s not difficult to do this if you have an investment guide. There are only four basic investment options. You will need to know how to invest, and create a sound investment plan that will work in both good and bad times. A good guide to investing can help you do that.

This means that learning how to successfully invest over the long-term is a two-step process. You won’t be able to understand step 2 if you skip step 1. Step two is essential if you want to apply the investment knowledge that you have gained in step 1. I said that it is difficult to invest now. Let me back this up now with my 35-years of investing experience. I will share the four basic investment options available to all investors. This is a quick guide to investing and a wake-up call. Investing is not easy for beginners today.

These are the four basic investment options, in order from most risky to least: bonds, stocks, safe investments, and other investments. Bank accounts and money funds, which pay interest, are safe investments. These days they don’t pay much. Late summer 2010 score: 1-year CDs less than 1%, money funds less than.05% or one-twentieth percent of 1%. This is not normal and it is actually quite scary. As they have done in the past, the government cannot lower rates to stimulate the economy. We already see zero interest rates on the money market.

Average investors move money into bond funds to get higher interest income, but these bonds are not safe investments. Simply put, bonds lose value when interest rates rise. This is a fundamental investment fact that you can count on: interest rate risk. Bonds aren’t the best investment option if you think interest rates will fluctuate like they have always done and will continue to rise in the near future. We now have two options left.

Any guide for investing beginners will tell you that stocks have an average return of 10% per year over the long-term. However, the problem is that the average investor would have made a better investment in safe bank investments over the past 10 year. The stock funds that manage millions of investors’ money suffered a loss of around 10% per year over the last three years. Investor confidence in the stock market and economy is low as billions are pulled from stock funds and moved to other places (like bond and money funds) to seek greater safety.

Smart investors looked to alternative investments, such as real estate, to find opportunities in times of uncertainty and low confidence in the stock markets. This has been a problem because the financial system is unable to gain the momentum needed to move things forward. The high unemployment will not go away, and millions of mortgages “under water” as people choose to walk away from their financial obligations. Comparable to other investment options, gold and silver have performed well. If the past is any indication, it’s not a happy note when it comes to investing. In times of fear or desperation, people buy and hoard gold.

None of the four options we have are a BUY opportunity. The best minds in investment suggest that investors should change their perspective and reduce their expectations. Start with the basics, and then curl up with an investment guide for rainy days. You’ll then want to continue your education and read a beginner’s guide to investing. You might find that you enjoy the challenge once you get to grips with it. It is no secret that investing today can be challenging.

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