samedi 13 décembre 2008

Invest Wise By knowing Where to invest and Your Risk Tolerance

01:22 Posted by: Marokko Suche 0 comments

By Louis Soul

With investments, if you were going to purchase a new car, you would do quite a bit of research before making a final decision and a purchase. You would never consider purchasing a car that you had not fully looked over and taken for a test drive. Investing works much the same way.

With stock markets, learning about the stock market and investments takes a lot of time but it is time well spent. There are numerous books and websites on the topic, and you can even take college level courses on the topic - which is what stock brokers do. With access to the Internet, you can actually play the stock market - with fake money - to get a feel for how it works.

The stock market is one of the most popular investments around. Other types of investments - outside of the stock market - do not have simulators. You must learn about those types of investments the hard way - by reading.

Your risk tolerance

Determining one's risk tolerance involves several different things. First, you need to know how much money you have to invest, and what your investment and financial goals are.

If you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly, what would you do? In investments in definitely need a stock broker to help you plan on your investment. So don't go on without one.

A good financial planner or stock broker should help you determine the level of risk that you are comfortable with, and help you choose your investments accordingly.

Getting started

Start with an interest bearing savings account. You may already have one. If you don't, you should. A savings account can be opened at the same bank that you do your checking at - or at any other bank. A savings account should pay 2 - 4% on the money that you have in the account.

You can select the duration of your investment, and interest is paid regularly until the CD reaches maturity. CD's can be purchased at your bank, and your bank will insure them against loss. When the CD reaches maturity, you receive your original investment, plus the interest that the CD has earned.

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