Investing in the stock market has the potential to help you build a nice little retirement fund, but it takes time, dedication, and patience, as well as the willingness to suffer some losses in order to see those ultimate gains.
Investments are all about claiming a partial ownership in a company in exchange for providing them with investment funds — often referred to as capital — for use in growing their company. The nice thing about stocks is that there are many available, and you may even find that there are different tiers and thus price ranges for stocks within the same company. How much you have invest and how much you want to earn will determine the type of stocks you buy. Also, you’ll have to choose between common and preferred stocks: common stocks give you voting rights within the company, and preferred stocks give you guarantees of dividend payments. Unfortunately for some, voting rights and guaranteed dividend payments are typically mutually exclusive – which means you’ll need to decide what is more important to you: power, or money.
The number one tip you’ll most like receive for stock investments is to not fear loss. Loss is a natural part of stock investing, and even the most careful and conservative of investors will find that loss will happen from time to time. That’s why it’s so important to take the time to thoroughly research potential companies from whom you wish to buy stock, and to make the choices that will be the most likely to pay off in the long run. And, spread your money around: invest in low-risk, medium-risk, and high-risk stocks. The low-risk stocks will almost always provide a return, even though it’s low; the medium-risks will often provide an average return; and while the high-risk stocks carry the most risk, they also carry the highest return possibilities.
Fortunately for you, investing in stocks is pretty common, so you’ll be able to find free investment tips from a variety of sources. Financial magazines and websites are a great start, and you can also talk to your local bank or a private investment firm for additional info on how to best invest your money.
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