|
A community of people who love to write
The easiest domain name (Note the .ORG) - Absolutely Free! |
Home | Submit Articles | Login |
| ALL Categories | HEALTH | EDUCATION | FINANCE | TECH | WOMEN | ENTERTAINMENT | TRAVEL | |||
Safest strategy for long term investmentBY: Bharat | Category: Business and Finance | Post Date: 2008-10-17
The unreliable stock market: Lets us all agree, there is no one in this world who can predict stock market. We see financial gurus telling us to invest when stock market is going up while the other says to wait because it can go down anytime. Similarly when the stocks are going down, you will see analysts telling to buy now, while others suggesting to wait because the bottom has not been reached. I am not saying that these gurus are idiots, but there are so many factors in stocks that it is almost impossible to predict when is the right time to invest. Should I invest in Stocks at all? Yes, even though stocks are extremely unpredictable, they are by far he best long term investments based on my thinking.If you see the larger picture, stocks overall have always gone up. Some lucky people may be able to make money in short term but an equal number of people also tend to lose. It is very important to select a mutual fund which has less management and maintenance fees ( preferably under 0.7%), there are many financial institutions with a very low fee, for example most funds of Vanguard group fall in this category. What should be my investment strategy in stocks: You should try to invest 10% to 25% of your earnings in stock market regularly instead of only waiting for the dips, simply invest some amount every month. Never invest in individual stocks, select a diversified mutual fund (also called the balanced mutual fund) which which invests money all across the market (large companies, mid-caps, small caps) and across various sectors (finance, tech, energy, real estate) and in both international and domestic stocks and also allocates some money in bonds as well. A good example of this type of mutual fund is Oakmark Equity & Income I (OAKBX) (See finance.yahoo.com/q/hl?s=OAKBX to see it's holdings). How about Target retirement funds: Yes the Target retirement funds like VANGUARD TARGET RETIREMENT 2020 (VTWNX or VTTHX) are also a great choice, they move your money into less risky assets are your retirement comes close. Where should I invest the rest of my money: Personally I never prefer going beyond 40% of my earnings in stocks, although many people will disagree with me on this. Instead of renting, if you can effort to buy a home, please do that. Do not buy home when the real estate market has been rising like crazy. For example year 2008 has been a good time to buy as prices have come down significantly. Never treat your house as in investment, always buy a home when you think you can afford the payments comfortably for the entire loan period. I like to put 25% of the money in Bank CD's or fixed deposits. I like to keep very little money in a traditional bank like BOFA or Citibank, instead I prefer an FDIC insured online bank like INGDirect, HSBC Direct or EmigrantsDirect. These tend to offer much better interest rates than regular banks. Investing 10% of savings in gold every month is a good idea, infact you can also invest in a stock called GLD which buys physical gold, and investors need not worry about keeping the gold themself, but there is a small management / maintenance fee. One of the biggest strategy for long term investing is not to panic with ups and downs. Always have a 3-6 months of liquid reserve in case of emergency so that you do not touch your investments. 401K and Roth IRS's are a very good way of saving money without worrying about taxes. Living within means is another key ingredient for a successful retirement. This was my safest long term investment strategy, but this is not a recommendation for you. Please do your own research . Article Source: http://www.saching.com About Author / Additional Info: Additional Articles: * Entertaining the people through movies * How to stay calm during crisis and avoid panic * Why people forget old values. Men should remember core traditional values. * New Album - THE RAREBREED (Tracy Haynes) * Personal Email Etiquette Does this article violate or infringe on your copyright ? It is a violation of our terms for authors to submit content which they did not write and claim it as their own. If this article infringes on your copyrights, then use our Contact us form with the detailed proof of infringement along with the offending article's title, URL and writer name. If you do not hear back from us then contact us again in another 10 days. Thank you. Comments on this article: (0 comments so far) * Additional comments are now closed for this article *
Article Views: 1333 
Copyright © 2010 saching.com - Do not copy articles from this website. Important Disclaimer: All articles on this website are for general information only and is not a professional or experts advice. We do not own any responsibility for correctness or authenticity of the information presented in this article, or any loss or injury resulting from it. We do not endorse these articles, we are neither affiliated with the authors of these articles nor responsible for their content. Please see our disclaimer section for complete terms. |
| Home | Disclaimer | Xhtml |