Money & Investing - Banks.com

One of the fears I hear regularly is that with stock market volatility — and other upheavals in the investing world — that investing is “too risky” or “not smart” right now.

It is true that some types of investing may not be the best idea right now, especially for beginners. But investing is still a smart choice. It is important to use investments to allow the law of compounding interest to work in your favor. You just have to be careful about what you invest in.

Stocks

If you choose carefully, picking fundamentally sound value stocks, you can actually find some great bargains right now. Buying more while the market is mostly down on most days can mean great gains down the road. Index funds are another way to get into stock investing without exposing yourself to excessive risk (although that risk will always be there). Mutual funds can also offer stock investing diversity with lower risk than individual equities (but watch out for the associated fees).

Bonds

These are considered “safe” investments — when they are government bonds. Federal bonds regularly grow, albeit at a rather stodgy rate. However, they can make good investments in terms of safety, and they generally do better as the economy falters. For better returns (but greater risk) corporate bonds and municipal bonds can be invested in.

Currencies, Commodities and Futures

Currencies are rather risky. When you get involved with FX trading, you should have a high risk tolerance. It is possible to make quite a lot of money on the currency market, but it requires some practice and the ability to take chances with your cash.

Commodities and futures are also quite risky. These require knowledge of markets and savvy decision making. Any number of factors can affect how commodities and futures move, and it is important to know what you are doing and to have a high risk tolerance when you engage in commodities and futures trading.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock market, currency market, investing blog, index funds,
futures trading, investments, FX trading

Ben Bernanke isn’t in Barcelona right now, but his speech made earlier this morning was. And he has been speaking words meant to “build confidence” in the stock market right now — as well as the US dollar in forex trading.

Mortgage News Daily reports on Bernanke’s remarks concerning dollar weakness:

“We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of an erosion in longer-term inflation expectations,” he said.

Bernanke also addressed other issues, including inflation and the housing market.

Stock market and Ben Bernanke’s remarks

Bernanke’s remarks also gave the stock market a bit of a boost. Bernanke insists that the second half of this year will see economic recovery, and that is adding optimism to the stock market, causing it to recover some of its losses from yesterday. Black Enterprise reports on what Bernanke said about the economy:

After the central bank’s recent interest rate cuts, loans to banks and tax rebates, the second half of the year should bring “somewhat better economic conditions,” Bernanke said in a speech in Spain. The economy faces headwinds, however, and the inflation picture remains uncertain, he said, indicating that the Fed still intends to keep interest rates on hold.

It is clear that investing decisions will have to take this information into account, and that investors in a variety of sectors will have to consider their moves — at least for now — in light of Bernanke’s comments.

However, I am skeptical of how long “boosting confidence” will keep the economy moving. Something solid will have to emerge soon in order to have lasting effect.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock market, investing news, investing blog, Ben Bernanke,
economy, investing, forex trading

There are always a lot of investing ideas, tips and advice floating around out there. Today I thought I’d take a look at some of what’s going on in the investing world, from forex trading to real estate trends to commodities.

Forex trading

One of the investing products that has been growing in popularity lately is the forex exchange traded fund. ETFs can be traded on the stock exchange, and forex ETFs allow you to diversify into currencies without actually getting involved in forex trading.

Now, addressing the lack of forex ETFs for emerging market currencies, there are some new currency funds for countries like India and Brazil. And interesting thought.

Real estate investing

In the hardest-hit markets, it may be a great time to buy. As home prices move lower, investors are swooping in. This means that in some real estate markets, signs of life are starting to appear. If you are looking to make a real estate investment, and you can secure the funding, it may be a good time to go for it. Just make sure that you carefully consider the area you are looking into. You want to buy in real estate markets that, though hard hit, are more likely to recover.

Commodities investing

Oil prices are heading down right now, but how long will they stay down? Worries over how emerging markets will be able to keep up with prices have oil prices steadying. But will they fall further? Or will they make a turnaround and head back up? If you think they’ll be heading back up, maybe now might be a good time to buy — you know, while they are retreating.

For an interesting look at oil prices and how they are related to gold prices, check out this post on Power Wealth.

Finally, if you are looking for a list of good online discount brokers that can help you get started in investing, Blueprint for Financial Prosperity has a great review of some of the best.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss.