Table of Contents
Chapter 1: Growing Your Wealth with Investments
Chapter 2: Learn How To Invest
Chapter 3: Cash Investments
Chapter 4: Investing in Stocks
Chapter 5: Investing In Bonds
Chapter 6: Investing in Real Estate
Chapter 7: Investing in Mutual Funds
How to Invest
Making smart investments is not an easy task, especially for beginners. The first thing to do before investing is to research on the different types of investments and gain knowledge. Knowing how to invest and manage your money will make sure that your money works for your best interest. Here are a few things you should consider when you are planning your investments.
Timing
Choosing an ideal time depending on the type of investments ensures better returns. The best time to consider investing in a savings deposit or a Certificate of Deposit would be when the rate of interest is high.
The same goes for investments in bonds and government securities that offer a fixed rate of interest. You shouldn’t worry about interest rates when you are investing in stocks. In case of mutual funds too, interest rate shouldn’t be a concern.
However, for both stocks and mutual funds, the right timing will depend on how the stock market is doing. You would want to invest when the market is at a low and there is a lot of potential of an upswing.
Understanding Returns and Risks
Before you invest your hard-earned money, take some time to assess what you are going to earn and what you may lose from your investments. You must consider the rate of interest when you are making cash investments and purchasing bonds. When considering stocks and mutual funds, do a thorough research on the company whose shares you want to purchase.
No matter what you invest in – stocks, bonds, mutual funds etc, there is always a risk involved. One way to reduce your investment risks is to create a diversified portfolio and use the technique of dollar cost averaging where you invest predetermined amounts at regular intervals. Remember that you should avoid taking risks until you are skilled enough to handle them.
Keep Your Emotions in Check
Investments should be made by calculating the returns and risks involved in it, but not by how you feel about it. Going on an emotional ride whenever the market goes up or down, has a negative effect on the financial decisions you make.
You may be attached to your hard-earned money but that doesn’t mean you let your emotions manage your investments. Avoid being too affected by so called market gurus or opinions of your friends and family to keep out your emotions from your investments.
Next Chapter: Cash Investments