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Stocks & Mutual Funds

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Stocks verses Mutual Funds

While some may find that idea of comparing stocks to mutual funds a little bit
odd, since mutual funds are often made up of stocks, bonds, or some combination
of the two, it is quite necessary to compare the two when it comes to deciding
what is best for your financial outlook. Some of the more notable differences
will be discussed below in order to help you decide which investment type is
more suitable for your financial situation.

When it comes to investing for the everyday man or woman you really can't beat
mutual funds. Stocks carry hefty fees for buying, selling, and transferring
that significantly hinder any profits that would otherwise be made from the
transaction. In fact, these fees often serve to deter the trading of stocks
rather than encouraging it. Perversely, big trading companies offer hefty
discounts for their big spenders making the stock market trading game seem even
more exclusive by making it easier for those who already have a great deal
invested than they make it for the new guy trying to make his way on the
market. Mutual funds are much more accessible to those who don't have massive
fortunes available to invest and need to make small steps (such as $100 a
month) towards their financial and investment goals.

Mutual funds typically carry less risk than the average stock purchase as well.
This happens for many reasons. First of all mutual funds are not generally
invested in one sector, industry, or company. For this reason if one of the
stocks fails, the proceeds from the other stocks and bonds purchased will help
mitigate the loss, making it less noticeable. At the same time, the loss is
shared by a large group of people so that even if a slight overall loss is
experienced as the result it will be much less noticeable than if the stock
purchased was yours and your alone. Finally, the fact that the funds are
already diversified to a large degree helps insulate from huge fluctuations in
the market such as those seen recently when the sub prime mortgage industry
bubble popped leaving many investors ducking for cover.

Share the wealth. Share the risk. Mutual funds offer a sense of community,
commonality, and shared risk among those who buy into a specific mutual fund.
This is a good thing most of the time as it enables a large group of people to
share a much smaller portion of risk than if they were buying stocks of their
own volition. The existence of a fund manager means that there is someone "in
the know" who is looking after the profit of the fund and that has the success
of the fund at heart. This is something that you won't find when investing in
stocks. In fact, when it comes to the stock market the only people that really
care about how your stocks are performing are those that you pay to care for
these things such as your financial advisor, accountant, and/or stockbroker.

Another thing to consider about mutual funds is that they are much easier to
use and/or trade than stocks. They are much less expensive to trade as well.
You can purchase mutual funds from your local bank, online, and through many
online trading companies as well as through many company 401 (k) plans. In
other words mutual funds go out of their way to make themselves accessible. The
most important thing, really, when it comes to buying mutual funds is that you
devote some time to studying the history and performance of the fund you are
considering to purchase as well as the fund manager for peace of mind.

As you can see there are a lot of differences between stocks and mutual funds.
For small investors mutual funds are often the best route to take. They pose
less risk, impose fewer fees, and place owners in a position to accrue steady,
if slow, returns on their investments.

What is Stock?

Essentially, stock is a representation of ownership in a business. Granted it
generally takes a ton of stock, quite literally, in order to have any
significant ownership in any given business but ownership is what it
represents. It means that you have a valid interest in the company and a
legitimate claim to a portion of the company's holdings or profits. Owning a
share of stock makes you a part owner of the business in which you own the
stock. Ever wanted to own a Harley? How about owning a share of their stock?
It's probably cheaper and with gasoline prices hitting the roof lately might
make you enough extra money to buy your own Harley to ride as well as a taste
of ownership in the company.

Any company that is openly traded on the various stock exchanges can be
purchased (at least partially) through stocks. Some cost more per share than
others and some are much more stable than others. It's not really the best plan
from a business point of view to purchase stocks simply because you like a
company's products though I would like to think that there is something good
about the company and its financial future if they are putting out products
that you believe in.

When purchasing stocks for the purpose of profits you need to see the big
picture though and not simply focus on whether you like the company or their
products. This is a financial decision that can bring you big money, some
money, or cost you money in the end. If you earn big returns then it is money
well spent, if you lose money then lets hope that it was a learning experience
at the very least. A few things to look at when selecting stocks include the
following.

1) History. There is a lot that can be learned from a company's history. Does
it treat its employees well, has it experienced ups and downs along the way and
came out smiling, has it had its shares of upheavals and still managed to come
out ahead? You want to invest in a company that has a history of overcoming
adversity when possible.

2) Current performance. You don't want to linger in the past however as the
present can tell a lot about companies too. Owners and founders die only to be
replaced by boards who have profit in mind but do very little to instill the
same loyalty from buyers that previous owners managed to do. You want to avoid
these companies as they could be on their way to a few turbulent times ahead.

3) Forecasts and projections. While these are all very speculative you can
judge how well a company has met these forecasts in the past in order to
predict how it will deal with the future this time. If you feel good about the
financial future of a company and want to be along for the ride, perhaps the
company is worth the risk.

There are many reasons to purchase a great stock but the most important would
be a company that produces a product you believe in that treats its staff well
and provides an excellent working environment for all. It is much easier to
expect great things from company that treats its employees well than one that
does not.

Why Buy Stock?

The question of the century for many would be businessmen and women may be why
on earth would anyone buy stocks? Quite frankly the question should be why on
earth wouldn't they? Owning stock in a company means that you have stock in
that company. You have an investment, however meager, in the success and
failure of that company and for this reason you have a little bit of ownership
in the company as well.

Many people purchase stocks for many different reasons. There are about as many
reasons for the purchases as there are people. Some people hope to accumulate a
large amount of stock within a company so that they may wield some level of
power within that company. This is not always the case though in most companies
those that own large quantities of stock do have a bit of a voice when it comes
to the decisions being made concerning the future of the company (companies are
responsible to those that hold shares of stock after all).

Others want to own a little piece of a company that produces a product they
believe in. I love chocolate. For me, it makes perfect sense to invest money in
Hershey stocks. It's a product that I believe has a solid future (I also happen
to know a lot of other chocolate lovers), an excellent product, and real
potential for new products, and an eye on emerging markets. These are things
that those purchase stocks should look at before buying stock. At the same
time, I realize that Hershey stocks are very established and any earnings on my
few stocks are going to be minimal. At the same time, this is a very stable
stock that is likely to bring in some money year after year. Not a sprint stock
to be sure but an endurance stock that I get a kick out of including in my
portfolio. In other words, some people buy stock simply because they like the
product.

Day traders buy and sell stocks like some of breathe in anticipation of making
money and nothing more (well for the most part, some do it for the rush and the
thrill of the hunt for those elusive stock market moments of triumph). Of course
most people buy stocks in hopes of ample returns on their investments, some just
expect more immediate returns than others. Day trading is a drive through type
of investing compared to the long lines that people stand in inside waiting for
the long term payoffs that retirements are funded upon.

You will find as many reasons for investing, as you will find reasons to
purchase stock. The questions you should be finding out for yourself is why
people by certain stocks and that is question that is going to be individual to
each person for each stock they purchase. There are no magic formulas for
success though there are many things you can do to lessen the risks of failure
when investing in stocks in bonds.

If you are interested in investing in stocks your first stop should be the
library. There are many books on the history of stocks, financial planning, and
that offer excellent advice on building a portfolio. Once you have a few
questions in mind you should take your savings and your questions to a
reputable stock broker and create a strategy that is tailored to meet your
investing needs.

Mutual Fund Basics

If you are considering investing in the stock market in one way, shape, form,
or fashion you've probably heard the term "mutual fund." If you are like I was,
you probably have no real clue as to what the term actually means in terms of
financial benefits or even exactly what a mutual fund is. Hopefully, reading
this will clear up a few of the details for you so that you can move on to make
informed decisions about where and how to invest your money.

I should begin by pointing out that there really is no method for investing
that is completely without risk. That being said, mutual funds have lower risks
that many other investment options, which makes them an attractive purchase for
those that are unsure about investing. In fact, for the purpose of savings,
mutual funds often have much better rates of return than the average savings
account at your local bank and the risks are minimal in this type of
investment, particularly compared to other riskier ventures.

So back to basics, mutual funds are, simply put, a collection of stocks and
bonds that are owned by a group of people rather than one individual investor.
This accomplishes a few things. First of all, it allows investors to buy in
with considerably less money than it would take to purchase the same
'portfolio' on their own and it spreads the damage out among a group of people
should something go wrong. In addition, because it isn't one single stock or
bond or generally even one sector of the stock market, the risks for a complete
and total loss are reduced to some degree. Keep in mind however that the market
does simply have bad days on occasion and there is little that can be done
about that short of stuffing your money under your mattress and it certainly
won't grow there.

There are plenty of advantages and disadvantages in regards to purchasing
mutual funds. You won't find the flashy swings, dips, dives, and other grand
maneuvers in the typical mutual funds. Most mutual funds are selected because
of their stability not for in hopes of massive profits though some mutual funds
are, admittedly, more aggressive than others. It really depends on how much of a
gambler you are by nature and how much of your investment and retirement you are
willing to risk whether or not you will be satisfied with mutual funds as part
or all of your investment portfolio.

Diversification is one of the key ingredients of a healthy portfolio and mutual
funds will help you work the diversity you need into your portfolio in short
order. If you are young and just beginning your career and in no real hurry for
retirement this is one of the safest ways to invest your money for the long
haul. Unfortunately it may lead to a comfortable retirement but is unlikely to
lead to a flashy retirement, as most mutual funds do not have the high payoffs
that many investors seek.

There are essentially three types of mutual funds with a few variations on
each. First there are money market funds. These funds are great for the
long-term investor who has a slow and steady approach to investing and will
generally be better than leaving your money in a savings account collecting
interest but there are better earning funds to be found. Second are the equity
funds. These funds provide slow growth over time as well as some income along
the way. Finally there are the fixed income funds. The purpose of these funds
is to provide a current income over time. These are not funds that are
anticipated to increase in value only to maintain a certain standard of living.
This is great for those who have retired or investors that are extremely
conservative in nature. Hopefully this finds you knowing a little more about
mutual funds in general and preparing to learn even more about how to take
control of your investment options and make these key decisions for your future
and that of your family.

Mutual Fund Pros

Every investment type has its share of pros and cons, the same holds true when
it comes to mutual funds. For many investors this is the only way to go while
others are very wary or even contemptuous of those who elect to navigate the
safer waters of mutual funds rather than taking the risks of the open seas of
the stock market. Either way you should understand that there are many benefits
to be found by working with mutual funds rather than stocks. You will find a
good many of these benefits listed here.

1) Safety in numbers. In a mutual fund you pool your money with a group of
people in order to buy a certain set of stocks or bonds or some combination of
the two. In this you share the risks among you. Some will argue that you also
share the rewards but that is the price you must pay in order to have the
security that comes with shared risk.

2) Diversity. You won't need to worry about intentional diversification with
mutual funds for the most part because they are already diversified for you. In
most cases you have to purchase very specific mutual funds in order to get a
group of stocks or bonds that are too similar in nature, as this would defeat
the purpose for many mutual fund investors. It is possible to purchase an
industry specific mutual fund though that does increase your risks to some
degree. Having your investments spread out across industries and investment
type helps minimize the impact should a catastrophic loss occur in one area the
blow is softened because the fund encompasses more than one specific stock or
bond.

3) Professional management. The average citizen would be hard pressed to afford
the services of a financial advisor or stock broker and still have a significant
amount of money left in which to invest. You are graced with the skills of a
professional investor to guide your fund through the shark infested waters of
the trading Bermuda triangle while you are allowed to put your mind to rest and
focus on other things such as the places you will go when retirement strikes or
the college educations your children will have courtesy of your investments
today.

4) Lower transaction fees. This is a huge benefit to many investors who know
without a doubt that those transaction fees can literally kill the profits
you'd make on occasion. The reason the fees are often lower is that mutual
funds are purchased in large lots because they use the collective monies of a
large group of people to make a larger purchase rather than using a small
amount of money from one person to do the job. Same fee, but more bang for the
buck and it's divided among others in the group rather than one person
absorbing the entire transaction fee.

5) The ability to cash out at any time. This isn't really different than stocks
but for those who are considering all with no preconceived understanding you
should understand that you can get your money out whenever you need to if
emergencies arise. There are fees involved of course but you can recover your
investment most of the time and bring home a bit of a profit on occasion.

6) Easy as pie. This is something that most people overlook when making
investment decisions but should pay a little more attention to. It is easy to
purchase a mutual fund and it can often be done for very little money,
especially when compared to stock purchases.

There are a few downsides to dealing with mutual funds as well though for many
the benefits far outweigh the potential for lower returns, which is the most
commonly complained about detraction from mutual fund investing. It is still
worth checking out the cons as well as the pros when it comes to investing in
mutual funds compared to stocks, bonds, and other forms of investing.

Mutual Fund Cons

Just as there are many benefits to investing your hard earned dollars in mutual
funds there are a few drawbacks to this decision as well. In order to make a
truly informed investment decision you need to be aware of both the pros and
cons of mutual fund investing before you make the decision as to whether or not
this style of investing is suitable to meet your financial needs now and in the
future. Keep reading for a little bit of enlightening information on the
downside of investing in mutual funds.

1) Low return on investment. While you can make a comfortable retirement for
yourself by investing in mutual funds you won't find the swift and bold flips,
turns, and swings that you might find in the sales of certain high yield
stocks. In fact, mutual funds are more the slow and steady wins the race sorts
of investment methods, which are effective in their own right but, while
providing comfort, will not bring copious amounts of wealth.

2) Dubious management. While this isn't true of all mutual funds you need to
check the fund manager out thoroughly before buying into the fund. You never
really know whom to trust in this day and age and many people have complained
that they would have done better making the decisions on their own rather than
relying on the fund manager in order to do so. Of course, when you are making
your own decisions you will have other worries on your mind at all times. So
professional management can be a benefit or a downside depending on the manager
you get for your fund.

3) Too much of a good thing isn't really good. The problem with mutual funds is
that the funds that are doing well and netting high returns for its investors
are often quickly inundated with new investors wanting the same results and
there is only so much the manager can do to make good on the money that has
been invested. There is another issue in which the fact that funds purchase
such a small portion of so many stocks that when one or a handful of the
companies that the fund is invested in do extremely well, the pool sharing the
profits is so large that the impact is often negligible.

4) The big killer for many investors is that the fund manager takes actions
that are right for the fund and those actions may not be what is best for your
individual situation. A broker or financial planner that you deal with
personally is much more likely to make financial decisions for you that are
geared towards your individual needs and not the needs of a much larger group.
If you want individual advice and guidance then a mutual fund is definitely not
the way to go. You should also avoid them if you are in a precarious situation
when it comes to things such as capital gains taxes, which can significantly
impact your actual profits.

5) Personal control. Are you a control freak? Many of us are and when you go
with a mutual fund you are giving someone else control of something that is
often very personal. No one likes the idea of being at another person's mercy
when it comes to retirement or planning for the future and you are essentially
putting your retirement, your vacation home, or your child's college education
in someone else's hands. This is a frightening situation for someone who is
typically in control of these investment decisions.

It really doesn't matter whether or not you ultimately decide to include mutual
funds in your investment portfolio. The important thing is that when the time to
decide presents itself you are in a position to make an informed decision about
whether or not you want them included and to act upon the decision you make for
better or for worse.

Why Invest in Mutual Funds?

If you are studying the stock market and your investment options it is quite
likely that you've come across the term mutual funds a time or two. If you
haven't you might want to grab a cup of coffee and listen for a minute or two
because you just might find something you like in the next few paragraphs.
Mutual funds are a kinder gentler method for investing in the stock market and
working to secure your future and retirement. If stocks are sprinters when it
comes to building a nest egg then mutual funds are the marathon endurance
runners meant to secure that nest egg.

You will discover once you get into your research a bit that some mutual funds
are a little more aggressive when it comes to securing your future income than
others and yet remains, in most cases, a safer bet than playing the stock
market without a safety net. In fact, many consider mutual funds a safety net
of sorts. While they may make the show a little less flashy and the stunts seem
far less than death defying they do provide a nice steady performance over time
and that is what matters in the end, isn't it?

So why should you invest in mutual funds? Well there is no clear-cut reason
that you should. It always comes down to personal reasons when playing the game
of money investing with stocks, bonds, and any other means you have of
investing. There are many reasons that mutual funds are attractive to investors
and we'll go over a few of those here. Ultimately, however, it is up to you to
decide whether or not investing in mutual funds is the way to go for your
financial needs and the safety and security of your financial future. The truth
of the matter is that this decision relies, almost completely, on how many risks
you need to take and how much of your future security you are willing to risk.
It could be that stocks, bonds, and mutual funds in some combination is the
best direction for you to go with your investment dollars.

Stability is the first reason that many people choose to invest in mutual
funds. In a market that is volatile at best it is nice to know that most mutual
funds experience slow and steady growth over time. There will be some days that
are better than others but in the end there is generally noticeable growth in
the funds.

Leaving the headaches to someone else is another reason that mutual funds are
popular. When it comes to mutual funds there is a fund manager that is in
charge of deciding what to do with the money that has been entrusted to him by
the group at large. This means that the burden is off your shoulders and you
can actually enjoy your free time rather than spending those hours pouring over
contradictory information about market trends that could lead you to a right
decision as easily as they could lead you to the wrong decision. This way you
get to leave the decision making to those that are qualified (presumably) to
make that decision. You will of course want to check out the fund manger and
his or her performance history.

Another reason that mutual funds are popular and may be for you is that they
allow the little guy to invest. In a world full of little guys it is nice to
know that we too have the opportunity to make some money in the market and
secure our financial situation when we reach retirement age. Buy ins for mutual
funds are much smaller than it would be to purchase stocks on your own because
there is a group of people who are essentially pooling their monies together in
order to make the purchase. Not only is the risk spread throughout the group but
also the buying power is multiplied.

Whether this is for you or not, there are some serious advantages to be found
by investing with mutual funds.

Why Diversify?

Investing is a risky venture whether you are a seasoned pro or a rank novice.
If this is your first turn around the dance floor you need to realize first and
foremost that all investing is a risk of some sort. There is no such thing as
risk free investing though certain types of investments certainly involve more
risks than others. This is the main reason that it is so important to have a
stock portfolio that is diversified enough to offer some insulation from
devastation due to one stock, bond, or fund performing poorly while also making
a noticeable difference when one performs extraordinarily well.

In other words, diversifying your portfolio tempers the risks you are taking by
investing to some degree. You've heard the old saying "never put all your eggs
in one basket" I am sure. Diversifying your portfolio moves your eggs around so
that your nest egg has more than one layer or protection from the evils of the
world and the fickle minds of men and the New York Stock Exchange.

You want to diversify your investment portfolio so that one sector or one stock
does not have the power to sink your financial future in one fell swoop. You
want to feel secure that your investments are secure to some degree despite the
many risks you will face. In fact you need that sense of security in order to
continue investing and building your financial future. You will find that it is
nearly impossible to work on a financial future you do not believe in.

If that isn't enough however you want to diversify so that you have the
opportunity to spread the wealth a bit too. You want to have a few
opportunities to take the risks that make the real money in the stock market
game. You cannot really do this if all your monies are tied up in ventures that
are designed to play it safe and run the marathon. It's nice, on occasion to
feel the wind in your hair as you sprint towards your financial goals rather
than going at the snails pace in exchange for security. In other words,
diversity brings a sense of balance to your portfolio too.

There are all kinds of investments. You will find many different companies,
many different sectors, different types of stocks, bonds, funds, and all manner
of investment opportunities that each bring to the table a different type of
risk and a different type of security upon which you can feast while organizing
your portfolio in a meal that should is meant to last a lifetime and keep your
family fed, clothed, and happy for many years to come. In order to do all of
these things your financial situation needs to be as well rounded as you are as
a person and your stock portfolio needs that liberal arts education that
includes a little bit of everything.

If you can accomplish this with your portfolio then your financial outlook
should be much brighter and bolder than it would be if you left all your
efforts in one basket and dined on one plate for the rest of your life. Take
the time to check out your financial holdings and if you don't have a little
bit of diversity on your plate it's time to add a little sprinkling of risk or
conservation according to need.

Why are Mutual Funds Popular?

Mutual funds are probably one of the most popular choices in investing today.
If you are wondering why they are so popular there are as many reasons as there
are investors. Some of the biggest reasons will be discussed here.

First of all, mutual funds are inexpensive when compared to some stocks and do
not carry the hefty commissions that go along with trading through the stock
market in many cases. The relative inexpensiveness of mutual funds when
compared to other stock purchases make them extremely popular among those who
have little money to invest but want to be setting money aside for future needs
and their golden years. It's also a way in which investors may begin to set
small sums, as little as $100 a month aside to purchase these funds and not
have all the money eaten up in transaction fees and commissions.

Second, mutual funds are a little easier to come by than most stocks. Many
people purchase mutual funds through local bank and company 401 (k) plans
whereas stock purchases require a brokerage service of some sort in order to
pull them off along with the brokerage fees that cut into the money invested as
well as the money earned when the stocks or funds in this case are sold.

Third, mutual funds allow investors to build up a slow and steady income for
their retirement years. While there are plenty of investment options that offer
more immediate and more lucrative returns mutual funds are the ones that can be
relied upon for the long stretch and that is what matters to many that are
entering the phase of retirement savings in which risks aren't necessarily
highly advisable because they need to capitalize on what is currently in their
funds without the risk of losing that money.

Another reason that mutual funds are so popular is because they are effective.
Mutual funds pool the resources of many in order to maximize the earning
potential of funds that are diverse enough to minimize risks while aggressive
enough to bring in a few profits along the way. The risks are further hampered
by the fact that so many people are absorbing little nicks of the cut along the
way. What would have been catastrophic if you had your entire investment or even
a large portion of your investment tied up in one stock is a nickel hit because
other stocks and bonds in the bouquet as well as the large number of people
sharing the hit have softened the blow.

Finally, mutual funds are popular because people see them as profitable. Even
if the profits are a long way down the road, the promise of profits tomorrow is
enough for many to make the investment today. If you haven't considered the
value of adding mutual funds to your portfolio now is the perfect time to do
just that. Mutual funds are a great way to bring stability to a volatile
market. They provide shelter for many stock investors from the cares and
worries of losses and hard hits along the way. A mutual fund is a great
addition to any portfolio that needs a little bit of stability. They are also
excellent tools for funding retirement goals and long-term plans such as
retirement homes or vacation houses.

What to Look for in an Online Trading Company

Trading stocks can be a confusing business in its own right. We are seeing more
and more people take the roles of financial planners upon themselves and
empowering themselves when it comes to investing in the stock market. The
prevalence of online trading companies has been instrumental in breaking the
barriers between the super wealthy being the only ones that could afford to
regularly trade in the market and the average man who now has the power to make
the same trades for less than half the commissions that once would have been
necessary for the same amount of work on the part of broker.

Oddly enough you need to be careful when picking your online trading source as
not all companies are created equally in this manner. One of the first things
you need to check out is the security with the company you are considering. In
most cases, the bigger names will offer the better security. If it's a name you
know there is some safety in knowing the name. They do not want to risk their
reputations by risking your money.

Another thing you will want to check out before deciding to sing up with any
one online trading firm is the costs per transaction and how those costs are
determined. There are all kinds of ways that little fees can hit you and become
big headaches later on. You want to know ahead of time what those fees will be,
when they will be charged, how they will be charged, and what exactly the fees
cover. The more you clarify from the beginning the less room there is for
misunderstandings later on.

Be sure you have a way to discuss problems, ask questions, and get answers
should there be a problem or a misunderstanding. This is as important as
knowing what the fees are going to be. If you cannot find a way to communicate
with an actual person, then I suggest moving along. There is nothing I hate
worse than endless cycles of holds and button pushing while listening to bad
music and fuming over why my time is being wasted and I'm paying XYZ company
for the privilege of them wasting my time.

Can you get around their website and do you understand the charts, bars, and
graphs? It is much easier to work on a website that isn't confusing to you.
Granted the first couple of days working on any site are likely to be somewhat
confusing the problem is that if you are having too much trouble navigating
through the website chances are you're going to have a little bit of difficulty
even in those moments when seconds count. The easier the website is for you to
get around the better it is going to be for putting you in the business of
making money.

If you can find all these things and more in an online trading website then
you've probably found a great website to begin your time as a stock market
investor. If the website also offers education and advice free of charge please
take the time to read through the suggestions they offer for a little bit of
guidance so that you do not feel as though you've been thrown to the
sharks-feeling as though you have someone working with you can make all the
difference in the world.

What to Look for in a Broker?

When it comes to investing in the stock market there are very few road signs to
help you get started on your way. Most people find that the waters are very
frightening indeed and filled with all kinds of new words, new meanings, and
confusing contradictions. For this reason it is best to work with a financial
advisor or stock broker while you are learning your way around the world of
investing in the stock market and mutual funds.

A broker can help you learn the terminology and make informed decisions that
are in keeping with your financial situation and your financial goals. He or
she can also help you identify your financial goals and your retirement needs
as well as a timeline for retirement. In other words a broker is an invaluable
tool in helping you secure the financial future of your dreams.

When you are searching for the right stock broker to work with you will want to
consider a few things first. You will want to find out about his history. How
long has he been in the business, how long has he dealt with specific aspects
of the business? What type of education does he have? Where he went to school?
And what, if any, advanced degrees, education, and certifications he may have
should be a nice set of questions to begin with. Many of these of course can be
found on the broker's website so you can save your time meeting with him for
more important questions.

Some of the important questions might be how much time he sets aside for his
clients, how much of a retainer (if any) is needed for him to take you on as a
client, what are his going commission rates, financial planning rates (if
applicable), and if he is going to be available to you or dodge your calls and
emails. You can often get a hint about these things before you are a customer.
If he dodges your calls and emails when he's trying to get his hands on your
money, chances are he will do the same once he has them on your money.

Get recommendations from friends and family and ask them the same questions
about fees, commissions, and attention before you even talk to a financial
advisor. The most important thing you can get from your time with a broker or
advisor is a foundation upon which you can build a financial future. If you can
learn as you go by asking questions of your advisor and having them answered you
just might create a situation in which the two of you have a lifelong and
beneficial working relationship.

This brings me to my final recommendation. Go with a broker that you feel
comfortable talking to and secure handing over a large portion of your money
to. This person is going to help you plan your financial future you need to
feel as though you can trust him to make the right decisions for your financial
dreams and goals. If you cannot then you need to seek advise and guidance
elsewhere.

Finding the right financial planner or stock broker to help handle your
financial needs will take a huge weight off your shoulders while allowing you
the freedom to worry about today while he worries about your tomorrows.

What is Day Trading?

Day trading is the act of buying and selling stock throughout the day in hopes
that they will make a substantial gain for the day during the course of their
trading. The reason this is possible is because the prices of stocks fluctuate
wildly during the day just as they fluctuate from one day to the next. This
leaves the market open to those who relish the opportunity to profit off the
pennies that others will sell to save. It can be quite a lucrative practice but
carries with it a level of risk that is almost equal to investing in penny
stocks.

The rush that is received from day trading efforts is often compared to the
same rush addicted gamblers get when walking into a casino. In fact, those who
have gambling problems are strongly discouraged from participating in day
trading activities for obvious reasons. Investing in the stock market carries
some risk as a rule. The risks are magnified when you enter into risky
practices such as day trading but the high profits that this type of trading
can bring about is often incentive enough for adventurous investors to take the
risk. In fact, many enterprising investors make lucrative livings from day
trading alone.

There are many that carefully analyze the market and create elaborate formulas
for their day trading efforts to varying degrees of success. Those who do
succeed in this particular business are very secretive as to their formulas and
aren't likely to share. The point is that this isn't completely a game of luck.
There is some degree of skill involved in making the numbers work for you as
well as the smile of Lady Luck upon your fortune that is required in order to
win at the game known as day trading.

Most day traders prefer buying and selling on NASDAQ because it is generally
more of a roller coaster ride, ideal for day trading, than the New York Stock
Exchange (NYSE). The problem with this type of living is that you must
constantly watch the market for those tell tale signs that a shift is preparing
to happen. Lunch and sanity breaks can bring about destruction if you are
counting on trading a specific stock at a specific price for the day (going up
or down).

If you are the type of person that doesn't do well in stressful situation this
is definitely not going to be the trading style best suited to your financial
and sanity needs. This is a stressful gig often compared to the job of an air
traffic controller. Though the lives of others aren't in your hands only your
financial future. The truth is that much like the radar screens at busy
airports though the market is constantly moving and in you take your eye off
the prize for even a second you could miss the moment you've been waiting for
and disaster may strike. It's a real rush for the adventurous sort and torture
personified for those that are prone to nail biting and drinking antacids.

There are many 'safer' methods for investing your money that require a little
more patience and produce a little less profit but are much easier for the
nerves to handle. The Internet has made day trading a bigger way of life for
more people today than ever before. The stress is shared by many people across
the country though this is only one of many ways to invest big and earn big if
you are so inclined. If you love taking risks though and have the time to
dedicate to day trading this might be a great way for you to make the living
you've always dreamed of making. This is a great job for those who love the
highs and lows of a real roller coaster ride. Of course this is one job in
which nerves of steal are a job requirement. Do you have what it takes?




Are Penny Stocks for You?

Penny stocks are definitely risks that are better suited for the investor that
likes to go skydiving, skinny-dipping, and bungee jumping. Of course even a few
more conservative investors will find some attraction in the low risk promise of
hefty payouts that the right penny stock can offer. In fact, many investors
dream of being the one to find that perfect penny stock with absolute potential
that will someday become the next LDDS turned WorldCom before the fall. The
truth is that little businesses become big businesses everyday. Unfortunately,
those that make it to the big leagues are quite few in number when compared to
those who do not.

Penny stocks are a great way for small companies to finance growth spurts,
smooth over rough spots and manage to become even better. This also gives
companies a chance to restructure and by allowing their stocks to be traded as
penny stocks they are generating revenue that can be reinvested into the
company to great effect. Many times, this is a successful venture for the
company but there are many times it isn't. This is part of the risk that is
taken when investing in penny stocks. When the companies manage to pull
themselves together, grow at an exceptional rate, and become the company you
hope they can become the payouts are amazing. But do not expect immediate
results from your penny stock investment.

You should also be aware that many companies use penny stocks in order to run
scams on unsuspecting investors. It is nearly impossible to get all the
particulars about penny stock companies when investing in penny stocks because
unlike those companies that trade with the big boys (NYCE, NASDAQ, etc.) these
companies are not required to open their books to potential investors and do
not face nearly the same amount of scrutiny that larger corporations face when
opening their doors to investors.

But the question of whether or not penny stock trading is for your is going to
depend almost entirely on your personal sense of adventure and your willingness
to take risks with your money. There are many out there who firmly believe that
in order to gain much, you must also be willing to risk much. This is a way of
life for many that holds true for them in love, life, and in money. These
people are much more capricious with their money and are willing to take the
risk without reservation or fear of a negative outcome. These are the people
who do wonderfully, win or loose when investing in penny stocks.

On the other end of the spectrum there are those who jealously guard their nest
eggs and bank their retirement security upon the funds going in that basket.
These are people that are quite likely to find themselves panicking their way
through a penny stock investment for many reasons. You can't really research
the companies (a travesty to people who prefer careful planning) and you can't
gain quick and easy access to your funds once invested. This removes some sense
of control over you financial health and isn't a comfortable feeling for
investors who like to feel in control. I can definitely relate to those who are
in no condition, really, to invest in penny stocks. It's a frightening
investment practice when houses, retirements, braces, and college educations
are on the line.

If you are the type to invest in penny stocks without carrying the heavy
baggage of worry, stress, and nervous sweats along with you then you may find
yourself in the position to change your wealth status. Even if you go against
your comfort level and make the investment there is much to gain. Unfortunately
the risks of this sort of investment are great as well and should not be
overlooked or underestimated. So it still boils down to you and the person you
are deep down inside. Are penny stocks right for you? Only you can answer that.

What are the Risks of Trading Penny Stocks?

You will hear about all kinds of risks that are taken when playing the stock
market game. There are high-risk stocks and investments along with many low
risk mutual funds and everything in between. When it comes to high-risk
investment options, penny stocks often top the charts as some of the highest
risks you will find in investment circles. Of course, they also offer some of
the highest yield of any other stocks as well because the prices start so low
and the sky is literally the limit. Do not get stars in your eyes however when
considering penny stocks as investments because there are many that have gone
before you into that type of investment and relatively few that have come back
from the brink as wealthy men and women.

Of course reason is rarely a good bedfellow for ambition or dreams and the low
prices of most penny stocks it's perfectly acceptable for even the common man
to have a few dreams of his own when it comes to obtaining wealth by playing
the stock market game and there is a much greater thrill with penny stocks than
you will find in any casino with penny slots.

Some of the common risks associated with penny stocks may not be risks one
would commonly assume are related to the stock market. The thing you need to
remember is that trading penny stocks isn't regulated in the manner that the
major stock exchanges are regulated. This means that a large safety net that
others in the stock market are protected, to some degree, by does not extend
into the murky waters of penny stock trading. It is the forgotten child of
oversight and investors are left to fend for themselves.

The first risk is fraud and this risk seems to be rampant in the penny stock
market. You will find all kinds of fraudulent penny stocks that are heavily
marketed by overseas companies that look glossy and legitimate on the Internet,
in investment magazines, and through many brochures, and even several carefully
crafted and well written press releases, newsletters, and emails. The problem
is that there is no product or the demand is deceptively overrated and the
stocks are essentially junk stocks worth nothing, if they exist at all. The
"businesses" in question take the money, dump, and run never to be heard from
again. Unfortunately this is quite common and many of the "companies" that
perpetrate the frauds are located overseas. This is the biggest risk though
certainly not the only risk.

The other risk is that the companies that are listing penny stocks are often
smaller businesses that are building or larger businesses that have fallen off
the major exchanges radar for one reason or another and are either going
through desperate restructuring or failing all together. Both pose very real
risks but if you choose to put your faith in the right new business or old
business that is getting its act together the proper way you can find amazing
profits on the other end of the roller coaster ride.

The other risks that are involved when trading penny stocks are the lack of
financial reporting. Corporations and companies that trade in the major stock
exchanges are required to release their financial information and account to
their stockholders. The same doesn't hold true for penny stocks. There is no
accountability and very little public information. This means you have to
really dig to find out credible information about the companies you are
considering and are left going with your gut more often than not rather than
relying on legitimate information that will be beneficial in your investment
decisions.

Penny stocks are very lucrative to those who manage to pull off the investments
and come out ahead. There are few instances in which there is little profit with
the lion's share of these investments yielding substantial profits for investors.

What are the Risks of Day Trading?

If you are looking for a truly risky venture for your investment dollar then
you may want to investigate the roller coaster ride that many know as day
trading. While those that swear by it for making and breaking fortunes will
swear there is a formula those that have been raked onto the rocky shores of
this particular trading business will be the first to tell you that their luck
ran out. Whether it's luck or science, day trading for many has proven to be
risky business at best.

The Risks

In order to be successful in day trading you must be absolutely prepared to
lose. You do not have time to think about failure, as it is likely at any
moment. This is a lightening quick business and sometimes the market moves much
more quickly than your fingers. This can result in unexpected losses as well as
unexpected gains along the way. These bumps in the road are nothing compared to
the highs and lows of actually being a day trader though. Forget the finances
for a moment and consider the risks of heart attacks, heart palpitations, and
strokes brought on the by excitement and heartburn (not that this can bring
about a stroke but it sounded good) of the moment.

Day trading is very taxing. You must constantly watch your computer throughout
the day for signs of life from your stock and act immediately. This is a high
stress job that many simply cannot handle long term. Unfortunately day trading
must become your day job because you have little time or energy to invest in
anything else. There are those that get a huge charge from day trading but this
is not a job for the average citizen it takes a huge toll on their health much
too quickly-especially those that are sensitive to stress as it is.

Perhaps the biggest risk is that you can become addicted to the highs and lows.
This is a huge problem because once you become addicted it is much more
difficult to temper your purchases and counter your losses. When you aren't
looking at it with a clear mind and unhampered perspective it doesn't seem
nearly as dangerous as it can be. Lives are ruined financially because of
irresponsible day trading and addictions to day trading that are much like
addictions to gambling. If you suspect you or someone you love is the victim of
this particular addiction please get him or her or yourself the help that is
needed as quickly as possible.

You should also understand that day trading isn't investing in the strictest
sense of the world. Day traders don't invest in stocks so much as they trade
stocks and while some may claim this is a simple case of semantics there are a
few major differences. Investors hold onto stocks for a little while with the
expectation of gains over time while traders buy and sell quickly hoping for
immediate gratification. Investors research and study a specific stock before
jumping in while traders study patterns and formulas and hope they made the
right decision.

Investing in and of itself is risky; day trading adds another layer of risk to
the equation. If you think you have what it takes to participate in day trading
you need to keep in mind that you should make sure that you have a few other
options in place for your investment future that require a little less risk.

What are the Different Investment Types?

You will find all kinds of investments available to you once you enter the
world of stock market investing and mutual funds investing. In fact, to those
who have never even considered trading stocks or funds there are all kinds of
options that you have probably never considered that are widely available to
those who make use of various brokerage services that can be found online or
off.

Among the most popular options for the trading public, of course, is the buying
and selling stocks. Purchasing a stock is the same as purchasing a little bit of
ownership in a given company. You will find that the average share of stock
doesn't provide you a big piece of the corporate pie by any means but if you've
always loved those Kodak moments wouldn't it be nice to be able to say you are a
part owner in Kodak, perhaps then you will feel as though you really are getting
your money's worth. It is certainly incentive to encourage everyone you know to
buy products to help improve your potential returns.

Mutual funds are also very popular among the investing public. While they do
not work in quite the same fashion that stocks work you will typically find
that you own a few stocks and/or a few bonds in the process of owning your
mutual funds. These are definitely long-term investments but many happy
retirements are being built on these funds and they are quite valuable to the
average investor who seeks stability and profit in smaller degrees rather than
one at the detriment of the other.

Day trading is another form of investing that is gaining no small degree of
attention, not all of it good. For some people, day trading is an adventure
game though the costs can be quite high if proper care and attention aren't
devoted to learning the best methods for investing in this very risky
investment type. Day trading is not really investing so much as it is buying
and selling quickly in hopes of massive profits immediately. Most people
consider investing more of a long-term commitment but day trading is more like
a one-night stand.

Trading penny stocks is another risky business in the investing arena but many
millions have been won in lost with these kinds of stocks. Many of the big
businesses you see listed on the big boards today began their trek to the top
of the heap as penny stocks and many find themselves as penny stocks once again
when on their way down from the heights of fame and infamy. Fraud is rampant in
the penny stock arena so be sure that you keep both eyes open if you decide to
try to navigate these shark infested waters.

With bonds you are essentially loaning money to the business or agency that you
are bonding with and they will pay you back at an agreed upon time. This is a
risk though admittedly not as risky as other investment methods. There are many
who swear by bonds and those that avoid them like the plague. I prefer to deal
with bonds only as a part of mutual funds but that is just my personal choice.
Whether or not you decide to take on a bond or two is strictly your choice as
well.

As you can see there are many options for those who are interested in
investing. The problem is often choosing the investment type (s) you wish to
pursue for your financial future.

What are Penny Stocks?

Strictly speaking, penny stocks are stocks that the beginning investor, in many
cases, can actually afford to purchase. You discover that penny stocks are
especially in new or up and coming companies or companies that are on their
last leg and treading water. This doesn't mean that even those companies that
have fallen off the big lists aren't worthy investments, all the same they have
been known to pick themselves up, reinvent themselves, and find themselves back
on the big lists. For the sake of this article however, penny stocks are
sometimes big companies going through a downward spiral, which makes them, just
like the new companies, somewhat of a risk.

The SEC or Securities and Exchange Commission classifies penny stocks as those
that sell for less than $5 a share. Of course other exchanges consider those
selling for less than three dollars or even one to be penny stocks.
Essentially, penny stocks are those that are not exchanged on the major stock
exchanges such as NYCE, AMEX, are NASDAQ. It really depends upon the exchange
in which you are trading. Penny stocks are a little more risky than many of the
rest however for good reason. Just as they are very risky however, they are also
quite profitable for those who manage to trade penny stocks successfully.

The risks in penny stocks go well beyond the obvious and are part of the reason
that payoffs are so rewarding for those who are fortunate. There is very little
skill that goes into successfully trading penny stocks but a lot of luck. If
you are a gambler at heart then this is definitely your sort of investment. It
is very important however that you enter into penny stocks trading with the
firm understanding that you aren't likely to be successful. In fact, chances
are good that you will lose as much as you make from the prospect. There are
those however, who have managed to defy the odds and win quite handsomely in
the game we've come to know as penny stock trading.

A few things you will want to keep in mind before you begin trading in this
highly volatile market include the following. First of all, penny stocks are
not like regular stocks where they are heavily traded and there is almost
always someone waiting in line to purchase. When you decide to sell it could be
a while before a buyer comes along. This means that penny stocks are not the
most liquid stocks on the planet and if you need quick access to your money
this is definitely not the stock for you.

Another thing to keep in mind when it comes to penny stocks is that there is
often very little information on these companies. Unless you have excellent
research skills and the time and energy to put them to use for your trading
endeavors you are very unlikely to find much background and financial
information on these companies as opposed to many publicly traded companies
that are pretty much required to open their books to investors. This is
dangerous to investors because knowledge is important and schemes are plenty.

Every penny you invest in penny stocks should be a penny that you are very well
prepared to loose and perfectly happy to earn a return with. You could hit the
lottery on your penny stock investment and earn literally three to four (or
more) times what you invested in your stocks. Chances are that the opposite
will be the case however and you will lose your investment. As long as you are
prepared to deal with the consequences and allow yourself to be pleasantly
surprised when your trades pay off you might be the perfect person to trade in
the penny stock market. When making your decisions about the types of stocks,
bonds, or funds you wish to include in your portfolio you may want to include a
few penny stocks for the sake of diversity and to risk a small sum of money on a
long shot. You never know when those long shots will pay off.

Trading stocks online

Online stock trading is becoming a very popular way in which to invest in the
stock market. Ordinary everyday citizens such as you and me can now trade
stocks like the pros without paying the ridiculous broker fees that are often
associated with trading on the stock market. This doesn't mean there are no
fees involved or that you won't be discouraged from capriciously trading
stocks. What it does mean is that you will be able to trade stocks, as you may
have never been able to do before because the costs involved in trading were so
high that only the wealthiest among us could really afford to work the market to
any real advantage.

You will find quite a few companies that are going to compete for your business
when it comes to empowering you to trade stocks online. It is best to go with a
business that offers education and advice in addition to the ability to trade.
There are many big names in the brokerage business that are getting in touch
with the technology of today and offering full service brokers and financial
advisors in addition to offering new online services that include Internet
trading.

If you decide to go with some of the bigger names in the business you should
understand that you will pay a little more than you would pay going with many
of the lesser name firms and trading companies. The good news is that the
bigger names have more to loose after working for decades to establish
themselves and develop a good reputation among traders. This means that they
are not going to be "fly by night" and are going to work to make sure you have
the best possible service from them for your future in the stock market trade.

Many of these firms in addition to offering the ability to buy, sell, and trade
online will also offer financial planning for retirement, future expenses, and
advice on how to create a fixed income from your investments. They will offer
many tips, hints, and advice free of charge on their website while also
promoting the services they offer through discounts in hopes of gaining your
business for some of the higher ticket transactions that really pay their bills.

Online investment services offer consumers the opportunity to invest with lower
commissions and fees which means you bring more of the money home when all is
said and done and spend far less on fees and expenses associated with
investing. By saving these fees you may be doing yourself a huge service but
keep in mind that the invaluable advice of a broker can often mean the
difference between mild successes and wild successes. If you can manage the
fees it is a good plan to at least consult with a broker or financial advisor
or planner once or twice a year in order to get the most out of your investment
money.

Online trading is great but you will find that it lacks the personal service
you can expect from a financial advisor or a stockbroker. Very little has such
a profound impact on your financial future than the ability to receive and
follow expert advice. While there is much to read on the Internet by way of
advice on investing in the stock market there is also a lot of conflicting
information just as there is a great deal of misinformation. This is something
that, when possible, is best left to the experts at least until you manage to
learn the ropes and have a few successful trades under your belt.

If you have the heart of gambler however, then it is your money you are playing
with and your future you are investing. If you are not spending more than you
are willing to lose then there is no harm in trying your hand at investing
through online brokerage services. You just might roll the dice and find a nice
payout for your efforts.

Stock Market Gambling

Are you addicted to gambling? How about taking risks? There are many who are
literally addicted to gambling and the stock market is their drug of choice.
There are many options available for their gambling pleasure and the tables, it
seems, are always open with various markets around the world opening up to US
money and the prevalence of Internet trading venues that are available to the
average investor through nothing more sophisticated than a computer and a modem.

Day trading is a particular draw for those who are addicted to gambling through
trading stocks. It provides the ups and downs very similar to the roll of the
dice or the ringing of the slot machines and instant hits and misses. It can
even be addictive for those who have never set foot in a casino. Of course this
type of investing isn't the only investing that is very much like gambling. Any
high-risk investment is going to bear some similarities, especially those that
offer high payouts to those who do succeed on occasion.

The problem is that that addictive gambling can be devastating to friends,
family, and finances. If you suspect that you or someone you love has a
gambling problem you need to either get help yourself or encourage them to get
help. There are many ways that this can be accomplished and anonymous help can
be found online. Day traders have gained so much notoriety as potential
gambling addicts that gamblers anonymous has begun a support group specifically
for those who are addicted to gambling via day trader trading.

If you have the personality that is easily addicted to things such as lottery
tickets, slot machines, chocolate candy bars, etc. this doesn't mean that you
can't ever trade on the stock market it just means that it might be a good idea
to avoid some of the higher risk trading and stick with more slow and steady
options such as mutual funds, CDs, and the like. Your rewards are likely to be
better over time and you aren't likely to experience the ups and downs that go
along with activities that closely resemble gambling.

An addiction to gambling is a serious problem that can ruin a family
financially. It is imperative that you get the help you need if you discover
that you have a gambling problem. The first suggestion is to close up all stock
market accounts that could lead to temptation. Removing temptation is always a
great first step when fighting any addiction. You also need to seek support.
There are many groups around the country such as gambler's anonymous that can
provide you a close knit support group whenever temptation strikes. If your
local chapter has a group that is designed specifically for those who are
addicted to gambling through day stock trading that might prove to be the best
choice to help you on the road to recovery from your addiction.

If you have been addicted to gambling in the past you should also avoid the
temptation that day trading may present. Addictions may be overcome but they
are never cured and temptation for many can prove to be the fatal downfall. Do
not allow your gambling addiction to take control of your life once again by
entering into the world of day trading after working so hard to overcome your
addiction in the first place and build a life after the sometimes devastating
effects that addictions can bring.

Gambling is nothing new to the world and there is nothing wrong with having the
sort of personality that likes to take a gamble on occasion. In fact, there
needs to be a little bit of that personality type in every day trader. It's
when the gambling becomes a problem and takes over your life and your ability
to make rational decisions about the money and the risks you are taking that it
crosses the line between gambling and a gambling problem that borders on or is a
gambling addiction. If you have crossed that line, get help today.

Reasons to Invest

Many people think of investing in the stock market as a means of reaching
retirement goals and nothing more. There is very little that could be further
from the truth though. There are many reasons that people invest in the stock
market that have a lot to do with the more immediate future. If you haven't
considered all the great things that can come about as the result of savvy
investing in the stock market and mutual funds, perhaps these ideas will give
you a little inspiration.

1) Buying a home. While you do not necessarily need the money upfront to pay
for the entire house it would be great. Of course, down payments are great to
have to and the more money you can spend as a down payment the lower interest
rate you can get, which means you will pay considerably less over the life of
your home. It also means you will have instant equity in your home that is
almost always a great thing.

2) Sending the kids to college. This is a long term investing goal but it isn't
as long term for many as retirement. Most of us can actually envision sending
our kids off to college while we aren't yet ready to imagine or day to dream
(or dread) what our retirement is going to be like. But many people wonder
often how they are going to give their children the college education they
dream of for their children.

3) Braces and other medical expenses. If you have kids you should be prepared
for unexpected medical and dental expenses along the way. Even if you have an
excellent insurance plan chances are that you will need to bear the brunt of
some of these costs along the way in the form of deductibles and co payments
that can be costly in their own rights. It helps if you have a little money set
aside and earning interest for these occasions.

4) Dream vacations. We all have places we'd love to go, things we'd love to do,
and sights we'd love to see. Most of us put a lot of time and effort into
securing our future and forget the importance of taking some time to enjoy the
time we have today. Our children are only young once so if you want to take
them to Disney it is best to do it while they are young and can enjoy and
remember the experience. More importantly they can remember sharing the
experience with you. This is one of the best reasons to invest.

5) To pay for the unexpected. Pipes burst, the heating and air conditioning go
out, and new cars are needed along the way. Most investments have a much better
return on investment than the average bank's interest rate. This means that by
investing the money you are more likely to have it making money for you while
you are waiting for those moments when you need to withdraw it in order to
handle those little emergencies.

As you can see there are plenty of reasons to invest your money that have
nothing to do with retirement though securing a comfortable retirement is near
the top of most people's lists of reasons to invest. If you haven't thought of
all these reasons and a few more and aren't yet investing, what on earth is
stopping you from getting started right away?

Low Risk Stocks

Stocks are a great way to secure your family's financial future. From braces,
to college, to weddings, and retirement you will find a way to pay for all of
these things and a few of life's unexpected emergencies along the way. For this
reason many people have an inner battle as to whether it is a better idea to
invest a little more aggressively or conservatively in order to get the most
for their money. The problem with low risk investments for many is the fact
that lower risks typically render lower yields. This means that there is less
money to work with when that important day comes (at least in theory). Of
course if you take a few larger risks along the way you still risk having less
when the time comes to cash in your nest egg and rely upon it for a living or
to take care of the needs we encounter along the way.

Common low risk investments include mutual funds and certificates of deposits
though there are many stocks that would be considered low risk. Those would be
the giants of industry that have withstood various tests of time and have come
out no worse for wear as a result. It is important to remember that low risk
doesn't indicate that the investments you are making carry no risk. There is no
such thing as a no risk investment though these mentioned above carry far fewer
risks than some of the more volatile markets in which one could choose to
invest.

Another low risk investment for many is to go with childhood favorites such as
Hershey, Mattel, GE, and other stocks that have been around for a very long
time and have become almost a household name. The longevity of these companies
makes them attractive for those looking for long term, low risk investments.
They are relatively steady experience growth that often goes hand in hand with
inflation. They do not generally experience the roller coaster ride that many
stocks on various exchanges may go through so they are definitely not fodder
for the manipulations of day traders. They are instead solid investments that
while not flashy in their offerings are stable and that is something that low
risk investors admire in stocks.

Certificates of deposit (CDs) have been known to offer significantly better
rates of returns than many mutual funds and most interest rates for savings
plans. If you are going to go the route of a mutual fund you either need to
carefully consider how conservative you want your mutual fund to be (more
aggressive funds can make more money than the average CD but you'll need to
carefully consider which will be best for your financial goals) before deciding
which is the better option of the two for you.

If you choose to go with mutual funds there are several types from which to
choose. You need to decide from the beginning if you prefer a mutual fund that
will give you a monthly income now or if you want a mutual fund that is
dedicated to slow growth and a constantly increasing value. You will want a
mutual fund that pays out a certain amount of money each month as you near
retirement. Until then it is in your best interest to avoid those, as there is
very little, if any, growth in the value of these funds.

Investing in the stock market is taking a risk. For some people investing in
the market is a leap of faith while others are more confident taking baby steps
towards their financial goals and future plans. Whatever type of investor you
may be you will find some value in having at least some mutual funds and lower
risks investments included in your portfolio. If you do not have any in your
portfolio at the moment, there is no time like the present to include them.

Losing to Win

In the world of the stock market, particularly when it comes to higher risk
investments such as day trading there is a bit of a learning curve. In other
words you must be prepared to lose in order to win. By doing this you will be
in a much better position for making wise decisions later on based on your past
experiences.

This means that you will either need to lose money by investing in a broker
that can assist you in making those initial trades while educating you on the
ways of the market or you are going to need to spend a little money learning
the ropes on your own. Either way in the stock market you will learn much more
from the losses you take along the way than you will ever learn through
successes that get you through the days.

The theory behind losing to win is that you will spend a little money learning
the ropes and that will be money well spent once you learn the ins and outs of
trading. It is quite likely that this will not be the only money that you will
lose along the way as you journey into the world of high finance and stock
market and mutual fund investments but it is probably going to be the largest
concentration of money that you will lose during the process.

If you are willing to risk those initial dollars for the purpose of learning a
new and better way of making your money work for you then you can expect to not
only establish a comfortable retirement but also to quite possibly make a
comfortable living in the meantime. Most day traders fail all together. Among
those that ultimately succeed they face heavy losses in the beginning at least
until they work out some sort of system that brings success their way more
often than not. In order to succeed in that particularly volatile market you
must be observant, pay attention to detail, and keep accurate and copious
records not only of all transactions but the results of those transactions for
better or worse. This helps you see patterns that you might not otherwise see
as well as keeps your wins and losses in black and white so that you are aware
of just how much money you are making and losing while learning the ropes.

For those who are willing to take these steps there is a lot of money to be
made in the stock market-particularly in the field of day trading. High profits
are great and something that most investors secretly dream of whether they'll
ever admit it out loud or not. The difference in those investors and those that
go the day trading route is that the day traders are actually placing themselves
in a position to experience these massive profits that everyone else will be so
jealous of in the end. It is a risk, no doubt, but careful consideration,
planning, and attention to detail can bring those big paydays.

Some people go to college for advanced degrees in their chosen fields.
Education is a big investment with high interest bearing student loans left
over when all is said and done. All in all, a year of learning the ropes with
day trading can prove to be a much lower expense than a full four-year college
education (interest included) and bring about bigger profits without creating
nearly the mountain of debt (provided of course that you invested wisely). If a
small learning curve and one year's worth of time can produce results such as
this wouldn't it be well worth it to try and see how much of a difference day
trading can make in your financial future? If you are at all interested in this
form or any other form of stock market investing take the time to learn a little
more before taking the plunge.

How to Diversify Your Portfolio

I'm sure you've heard how important it is to keep a diverse financial
portfolio. There are many reasons for this not the least of which is spreading
out the risks as well as the rewards so that one bad day on the market doesn't
do in your entire financial future. Many people have learned along the way that
the price to be paid for failing to diversify can be very high indeed. If you
aren't prepared to pay that price then the solution is probably much simpler
than you may realize.

The first thing you need to realize is that there is no perfect solution that
is always guaranteed to be a safe investment (there is no such thing as a risk
free investment only those that carry less risk than others). With this in mind
you can minimize the risks by spreading them out between several different
stocks, bonds, and funds.

It is important to seek the services of a financial advisor if you can at all
afford to do so. In all honesty you really can't afford to rest your financial
future in the hands of an amateur who knows very little if anything about the
way the stock market works and how best to structure your portfolio. If for
what ever reason you choose to go it alone there are many options available to
have a truly diverse portfolio.

The first thing you want to do is divide your holdings between several sectors.
This means that when one sector performs poorly you still have the hope that the
other sectors won't share the same fate. During the dot com bust a few years
back and the sub prime real estate bust more recently many people learned the
hardships that can come about by having too much invested in one industry. Had
they spread their investments around a little better many people would not have
been hit nearly as hard as they were.

Once you've done that you will want to purchase a few stocks, some mutual funds
(these are much lower risk funds that are designed to steadily but slowly build
value over time), and a few CDs to balance things out. There are all kinds of
formulas as to how to do this for maximum effect but the truth of the matter is
that you can't really determine the best route for you to take without knowing a
little more about your current situation and your goals and plans. This is why a
financial advisor is so important. Different concentrations of stocks, bonds,
and funds are preferable at different stages in your life and according to the
amount of money you currently have set aside.

Ultimately in diversifying you want to avoid having too great of a
concentration in one stock, one sector, and one investment type whenever
possible. You never want to rest your entire financial future in one stock,
bond, or fund because that really is an all or nothing risk and rarely turns
out good. If you get nothing else from a financial planner you really should
consult with one about how to best diversify your investment portfolio. He or
she can help you get started along the path to financially planning a brighter
future than you may have ever imagined for your family.

Benefits of Using a Stock Broker

I should begin this by saying that stock brokers are expensive. However, if you
are new to the world of investing and find the terminology, expenses, fees, and
process the least bit confusing it is best to utilize the services of a stock
broker that is going to work with you every step of the way and explain the way
things work at least for the first several trades you make. Stock brokers are
paid through commissions that are earned every time you buy or sell a stock.
For this reason they are great for advising you on which stocks to buy or sell
though their main goal is to keep you buying and selling because they earn
money on each transaction so be sure to take their advice, to some degree, with
a grain of salt.

That being said a good stock broker can help you learn the ropes about trading
stocks when you are just beginning in your investment efforts. Their advice and
services can be invaluable and well worth every penny you pay them provided you
find a broker that is going to work with you even though you are, presumably,
going to be trading on a much smaller scale than some of their high dollar
clients. In other words you want someone that is going to work with you even
though you aren't likely to be their biggest client anytime in the near future
unless they make some excellent decisions on your behalf.

Stock brokers can also provide excellent insight and invaluable advice on how
to diversify your portfolio in order to minimize your risks as far as your
investments go while building the foundation for a successful future trading in
the market. More importantly a stock broker can help you identify diamonds in
the stock business that may be disguised as lumps of coal. They have a great
deal of experience in this business, even more education, and often times
excellent gut instincts about what is coming next in a given stock.

This by no means indicates that the services or advice of stock brokers is
somehow infallible. This isn't the case at all. Everyone makes mistakes but by
following the advice of a stock broker you are much likely to make fewer
mistakes than if you were going it alone because you can learn from past
mistakes the brokers have made and hopefully avoid future mistakes of your own
by taking their advice and guidance to heart.

If the high commissions of brick and mortar brokerages are hard to come by or
sacrifice you may want to consider an online stock broker. While they often
won't have the pedigree and credentials of some of the stock broker experts
that can be found in many financial institutions on Wall Street they also do
not charge commissions that match those pedigrees and can be invaluable in
helping you make the most of your stock market investments. Learn when to take
the advice that is given for what it is worth and use it to your advantage.
Their advice can still help you much more than trying to muddle through the
intricacies of investing and online trading on your own.

If you decide not to go with a stock broker you need to understand that you are
doing so at your own risk. The roads of the stock market are difficult to
navigate even for those that have some degree of experience and there are few
roadmaps to help guide you along the way. A qualified and competent stock
broker can be the difference between a successful investment future and a
loosing your shirt on your first time out of the gate. Take advantage of the
benefit that a stock broker can bring to the table until you are confident in
your ability to navigate these waters on your own. It can make all the
difference in the world to your portfolio.

Are You Ready to Invest?

We grew up in world in which the news about the failure of Social Security is
almost as constant as the news about the failure HMOs. We all know that it is
unlikely that many people who are currently contributing to social security
will ever see the money we've invested into the program. At least these funds
are probably not coming back to darken our doors. This means we need to find
alternatives and end our reliance on the government for a comfortable
retirement that doesn't appear to be in the woodworks.

For this reason we are seeing more and more people in the twenty and thirty
something generation taking matters into their own hands and investing not only
for their retirements and the days when we can no longer work but also for those
days when things happen and we need to fix broken houses, buy new cars, or pay
hefty insurance deductibles for medical care. There are many reasons we choose
to invest and very few that would ever be considered the wrong reason. The
question remains, because there are so many out there who are not yet
investing, with so many reasons to invest, are you ready to invest?

Here are a few situations in which if you don't think you are ready to invest
you may need to revisit your opinions and decide that ready or not, you need to
invest.

If you have children and a job that doesn't offer a pension plan or matching
retirement fund then it is probably a good idea to invest on your own. Even if
you don't have corporate provisions for contributions you have alternatives
such as Roth IRAs that will give you a tax break for investing some of your
money and helping to plan for your own retirement.

If you have children that will some day need dental work, medical services,
and/or college educations it is about time that you began those savings plans.
Yet again there are tax deferred and tax fee options that are available and
having this money invested ahead of time can save you so much money later on
that it is worth making a few sacrifices along the way to secure the future of
your children.

If you want to give your daughter the wedding of her dreams then you absolutely
need to begin preparing, saving, planning, and investing about 10 years before
she's born. Weddings are expensive and if you are going to go the dream wedding
route you need to be saving some serious money in order to give her that fairy
tale.

Finally, if you want your retirement to be a nice comfortable existence and not
to be spent in your future daughter-in-law's broom closet you need to be ready
today to begin investing in your future retirement. Time is short, life
expectancies are longer than ever, and the costs of living are continuing to
rise at alarming rates. If you're not ready to invest you need to figure out
why and fix the problem so that you can be ready to invest and soon.

Investing in your financial future is the greatest gift you can give yourself
by far. If you aren't sure where to begin or how, perhaps it's time to seek the
services of a qualified financial advisor. His advice may prove invaluable and
may give you a much more comfortable future than you would have ever imagined
left to your own devices.





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