Category: Let's talk
I like to invest my money in cd's like certific of deposit not radio cd's. I would like to start a small business. I would like to do something like for music. I'm thinking about investing in a YTB www.ytb.com Do anyone have some business ideas? Check out www.blogtalkradio.com/time2listen also. Stocks are pretty good to invest but you have to look at the rate of them of the one you want to invest in. Users that's trying to succeed reply only.
That post made very little sense.
f you want to invest you got to consider your risk taking appetite, desired return, time horizon etc and then invest accordingly in something one understands. CDs have the lowest return, generally, but least associated risk, often the returns are, in fact, extremely low and money can be put in much higher yielding alternatives. Stocks are risky, there's no gurantee a stock will continue behaving like it has recently and there's no guarnatee you will get any money out of it, all you are buy is entitlement to the company's dividend payments, usually less than a dollar per share per year, some don't pay anything, and in the expectation that the company's stock price will continue to go up. We've experienced an incredible boom stock wise until this year but since August times have changed for many companies, especially in the finance industry, companies in energy and raw material trading have done extremely well. Since January most of the stock exchanges have lost between 5 and 20% of their value, which does not make for good savings. Generally stocks are good in the longe term, especially if you diversify, buy into more than one company and in different industries so as to minimize the correlation between the returns for each company, e.g. investing in oil and in alternative energy sources may be a good idea because prices may tend to move in different directions. Then there's real estate, although Americans woke up to the nightmare that real estate could actually depriciate. The mortgage endustry was based entirely on the premise that real estate prices could never go down and American buyers were strongly encouraged to leverage 100% i.e. take out loans for the entire value of the house, leaving no security buffer for percieved deflation. Once house went down in price and loans became much higher than the value of the house it is the best solution for the borrower to default, have lenders take the house and declare bankruptcy, during this the lenders, of course, lost money because the, supposedly, secure asset backing the value of their money wasn't worth what they thought and so they only got 90% of their money back. But buying a house and renting it out has worked well for me, investment wise. I'd go into a mutual fund myself, one with a proven track record and with fees that are not performance based, these funds can create structures to either infalte returns at a higher risk or lower the risk by using options stradegies. Another profitable field is FX trading *foreign exchange) and that's something one can do oneself with very minimal fees at places like www.xe.com, but this requires you to pay a lot of attention to the market, understand where currencies are moving and make predictions, I have a few friends who have done well out of the business though. Then one can engage in carry trades, finding a currency with high interest rate bonds, like Iceland, Brazil or Turkey, borrow money in, say, the U.S. and exchange it for local currency to purchase these bonds and enjoy the interest rate difference. Again, you are taking on an exchange rate risk but you could possibly gear yourself out of it by utilizing fx options. These are just a few ideas, I would not invest without a lot of research and I'd go with a fund where professionals are dedicated to maximizing the value of your money, even if they take some of it in return.
I would echo what Wildebrew said, I have invested in various areas over the past few months, with a range of time-scales, risks and returns.
Last summer (the last time the UK stock markets performed well) I bought a stack of shares in fairly solid companies in a range of sectors. These are currently performing between 10 and 15 percent down and what with the current crisis I anticipate up to another 10 percent dip during the year, depending on when the bottom comes. I'm not overly concerned though, firstly because these shares are a very long-term investment, plus I bought at the start of a dip. The exception is a mining stock that I bought in January (Rio Tinto) which is bucking the trend, however is also extremely volatile so I'm keeping an eye on that. It's a nerve-wracking rollercoaster for sure!
I also just invested in a group (mutual) fund which I pay into monthly and the managers choose stocks to invest in. Again this is a long-term investment and the lower share prices go, the more we can afford and (potentially) the higher the returns are. I don't have as much control as the stocks I bought myself, but it's two different ways of approaching the same idea.
Finally because the financial sector is in such disarray at present, banks are absolutely gagging for people to put money on deposit with them. This is demonstrated by the fact that you can get between 6 and 9 percent interest on a standard current account if you're prepared to put in some work and move your money (I have two of these and I'm prepared to move immediately if a better one comes along). This is good for the short-term as most of these offers are limited to a year or so, by which time you can either switch to another one (if the playing field remains the same) or move the money to a more lucrative scheme if one presents itself. I presume you're in the US, but people in the UK may find helpful stuff on www.moneysavingexpert.com and www.fool.co.uk
Do the research, don't panic and only ever invest what you can honestly afford to lose!
This summer I will open an account with ShareBuilder.com and start from there. Things are changing in this world now.