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

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. 

One of the most important things to remember in investing is that research is required. A bit of education goes a long way investing. It is vital that you understand how investing works, and that you do some research into the kinds of investments that you make, whether they are Treasury bonds, stocks, currencies or funds.

This doesn’t mean that you obsessively follow stock prices or bond futures each day. But what it does mean is that you need to have due diligence in figuring out which companies are fundamentally sound, or choosing mutual funds with low (or better yet, no) fees.

Be educated about the risks

You should also understand the risks of investing. While the point of investing is to make money, the risk inherent in investing means that there is a chance that you could lose money. Sinking a great deal of money into a venture that a friend insists is the “next big thing” is risky. On the other hand, investing in index funds or Treasury bonds is a little safer. But you should know: The bigger the risk, the bigger the returns (if the whole thing pans out, of course). You should under stand which investments are riskier, and which are likely to give steadier returns — although things in the market could change at anytime.

Know yourself before investing

Many people forget to educate themselves about one important factor before they begin investing — themselves. It is vital that you know your risk tolerance and other aspects of yourself before you begin investing. You should know what you have available for investing, as well as what you can afford to lose. You should also understand your own temperment before you begin. Can you handle the stress of riskier investments? Or will you be more comfortable with “safer” investments that come with more modest gains?

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.

Tags: investing education, stock investing blog, investments, risk tolerance,
risks investing, treasury bonds, understanding markets