Thursday, December 10, 2009

Investing in Stocks

Post by David Held

Playing the stock market game with your money can be hit or miss. Consumers are looking for safe investments that will ultimately make them some money before retirement. Many people turn to stocks, but the way the economy has been for the past 18 months the stock market seems to be extremely volatile. Stocks such as Goldman Sachs, Apple, and Google have gone down over 50%, then came back up 100%. If you were one of the investors who could the market on the down slope, you could have potential lost half of your retirement savings, but catching the market on the way back up could have doubled your savings. As previously stated stocks are risky business. Depending on your monetary situation stocks might not be the move.

Mutual funds have also been proven to be volatile. The standard mutual fund, Vanguard 500 Index, which mirrors the S&P 500 also cut in half over the recession and has not made it completely back like the stocks have. The scary part is many retirement funds (401K’s) are tied into these mutual funds, so all these people can do is sit back and watch, but it doesn’t look like the funds are making it back too soon.

The safest way to invest is in treasury notes, bonds, and bills because all of these securities are backed by the US treasury. So the chances of a default are slim to none. Make sure you do your research before you invest!

Sources #1, #2, #3

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