Anyone who tells you what investments to buy without knowing anything about you is giving you poor advice. A responsible way to decide what investments and strategies are best, is to start by deciding whether you’re willing to take big risks for the chance at big profits, or would prefer a safe and sure approach for lower potential reward.
One of the primary advantages in mutual fund investing is its simplicity compared to owning stocks — or so some investors believe. It’s true that professional management, diversification, and the ease of reinvesting earnings, are all great advantages. But when you pick one mutual fund over another, are you sure you are getting the fund that offers the lowest fees?
(photo: iStockphoto) One of the unrecognized dangers in the market is found in the attraction of exotic or complex strategies. Newcomers may find themselves drawn to complex (and risky) investments or investing strategies, when in fact they are better suited...
Most traders have heard of options, but few really understand them. And while the old adage that “a little knowledge is a dangerous thing” applies here, it makes sense to at least have a basic knowledge about options and how they work.
There are many investors who, after years of researching and managing their investments, have built up a solid knowledge base of stock or fund picking and are willing to take it to the next level. (Others can simply afford to set aside a certain amount of cash to “play with” on the stock market.) Those people move money in and out of positions on a daily basis — and take their profits from day to day rather than waiting for months or years.
Many first-time investors start out buying shares of mutual funds. They rely on professional management to select a portfolio of stocks based on whether they seek income or growth. However, most investors tend to pick which fund or funds to invest in by looking at past performance — and that isn’t necessarily the best way to make an investment decision.