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Investing Advice
With the advent of the Internet and online brokerage firms, somehow the idea was spread that everyone could be a stockbroker (”day trader”) and make money buying and selling paperless holdings. Nothing could be farther from the truth, of course. As always, getting good investing advice is a complicated, tricky matter that must be undertaken with the greatest seriousness and care.
Sure, you can set up an online account and start buying and selling shares in companies represented by short, unpronounceable acronyms, but if you haven’t put at least a couple of years into study about it, investing this way can be a very brief, very expensive hobby. On the other hand, it is no longer true that you should just hand your money over to stockbrokers and let them decide what’s best. As is often the case, the truth about investment advice is somewhere in the middle.
Why invest?
Before you can even judge if reputable investments are appropriate to your situation, the first thing you need to do is decide why you are investing. Is it to have retirement income? Is it to get as much return as possible, as quickly as possible, in order to invest in something else? Is it for the kids’ college funds? Once you decide what you are investing for – one of these reasons, or some combination of them, or something else entirely – then you can decide, with some focused research and some help, how to assess the investment advice that you will get.
In addition to the Internet sites that allow you to place stock trades, there are plenty of others that simply offer advice, on everything from investing and saving to insurance and home/business budgets. Since there is a huge range of opinion about investing, it is best to get input from a variety of different sources, particularly ones that do not agree with one another. This is the best way to stay balanced and independent and ensure that the investing advice you get is supported by facts and figures.
Risks and rewards
You may discover that, along with a balance of long-term and insured investments, you can afford to risk some reasonable amount of money in more active, “speculative” investing. After doing your homework, and deciding what your limits are, this is one of the things that you can do with an online trading account. The potential for greater return carries greater risk, of course, so make sure to do your “due diligence” and come up with balanced, sensible investing advice.
Thoughtful, realistic investing advice will balance safe (“conservative’) investments with riskier, less-secure ones. The latter, of course, pay off more than the safer alternatives, when they do pay off, that is. You must learn how to balance speculation with safety, and very early in the process you will need good advice on the maximum amount of your invested funds you are willing to lose. Most of the time, this amount will be a mere fraction of the total. Veteran financial planners will help you determine what is right and best for your particular situation.
If you retain a student mentality and continue to study investments and financial planning, investing can be both fun and rewarding. Read a variety of different opinions, play it safe and don’t put all your eggs in one basket. In other words, stay involved, interested and motivated, taking in a balanced diet of investing advice. This way, investing stays fun – and one bad day or wrong stock pick won’t ruin you.
Topics: Investing |
