Many people invest in the broader markets without even realizing that’s what they’re doing. They invest in company stock options, 401K’s, ROTH IRA’s, regular IRA’s, bonds, certificates of deposit, and savings accounts. Other things are investing which you may not even consider. Your wonderful stereo system, the hydraulics on your car, your home; all things which you will hopefully one day own free and clear and which should appreciate in value through the years. So investing happens every day; it’s important not to mistake investing with trading. If you are interested in long term appreciation there are many avenues you can take to find long term success in our modern world; even in a place as volatile as the stock markets.
Investing and trading are two different things; many people confuse the two. To trade you need to be very adept, read up on what’s going on, have great timing, and have a fair amount of expendable cash because you need to be very comfortable possibly losing everything you’ve got. Trading is not for most people. However investing is a different thing. While yes it is possible for you to lose everything when you “invest” – investing in some things also comes with a relative amount of security. Try these routes when you are considering investing so that you can have a long and happy relationship.
Invest where you work: Many people get involved in their companies 401K or IRA program. This is a great way to get invested in a place that you also have confidence in because they write your paycheck every week. Moreover a company stock program may also come with a “matching” option meaning that if you invest a set amount every month or quarter (which comes, by and large, directly from your paycheck and is usually deducted tax free) then the company will match your contribution. This is a sign of strength in a company because you are both putting money to work in the widgets you make; further bolstering the confidence you and your employer have in the work you both do.
Commodities: Many people may be hip to the recent tear which gold has been on. While investing in gold or other commodities does come with inherent risks, these risks often at least keep a step up on inflation over the long term. Natural gas, oil, lumber, electricity, platinum, and diamonds all present ways to invest in things which people have always and probably will always place great value on. Consider the future too; wind, solar, and other alternative energy plays as a smart way to hedge your portfolio to infinity and beyond!
Invest in your money: Yes, banks are risky, but following the recent financial meltdown the long players in the market have come out stronger than ever. Consider where you keep your own money; JP Morgan, Bank of America, Wells Fargo; these all present different levels of security for your money which could present long term success for your investment portfolio.
Trading stocks is a risky game; inexperienced investors almost always lose and even the pros lose every day. The way to stay ahead as a trader is to have more winning days than you have losing ones. While average folks might not be too comfortable with the ferocious mentality of traders, the fact remains that investing over the long term can be a great way to fund your life “after-work” and can continue to pay dividends long into the future, whichever way the day-to-day markets move.