Stock Market

An easy way to invest in the Stock Market

Before you start let me clarify that I do not intend to give individual advice but general information. The easiest way to invest in the stock market is, in my opinion, through a mutual fund, that is, a diversified portfolio of shares, a company registered in open versions that sell shares to the public at a price of supply and when the investor redeems request, the value of net supply. In simpler words, mutual funds meet many people‘s money and invest it in stocks, bonds and other investment vehicles. The value of the shares of a mutual fund is related to the value of all the shares it owns in a given time. The price can go up and down and therefore can win but also lose money, especially when investing in the short term.

There are many types of mutual funds. Some could be classified as index mutual funds because they mimic the portfolio of the major indexes such as the SP 500 or the stock market as a whole. The advantage of these mutual funds is that they often charge lower administrative costs of managing and spread risk among many stocks. There are also mutual funds that are actively managed, meaning that its administrators decide which stocks to buy, how to buy, when to sell, buy and in what sectors. Also fall in this category of mutual funds specializing in areas such as technology, financial institutions, oil, international stocks, and so on. In general, the higher the specialization of the fund and the lower the number of shares held, the greater the risk. It is important to mention that there are mutual funds that are called “load” and make it a charge, which can reach 5% or more when buying the shares. Imagine has begun to invest and you’re losing some of their money. F or this, I would avoid mutual funds and seek “no load”.

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In my opinion, one way less risky and less costly to invest in the stock market is through mutual funds indexed to diversify risk from hundreds of actions that mimic the overall market. You can buy funds directly from the issuing companies or through investment brokers. Visit several companies, consider whether you feel comfortable, if you offer valuable information or are simply trying to “sell”.

Some people may invest $ 50 a month; another may invest $ 200 or more. By investing every month in highly diversified funds with low administrative costs, avoid the risk of investing all the money when the stock price is inflated, distribute the risk among many stocks and to pay administrative costs low, you get more money for investment. Many people, who invested in shares of technology companies when they rose at inflated prices, lost a lot of money when the price paused dramatically. However, anyone who has been buying shares every month in mutual funds diversified among stocks, bonds and cash, and has held other investments, real estate and personal business for example, will probably not suffered so much from the vagaries of the economy.

Before investing is important to visit a licensed financial adviser can help you determine your goals, analyze your financial situation and make a plan to invest in a diversified portfolio. There are people who at one time should not invest in stocks. For example, if someone has credit card debt paying high interest rates which should pay those debts before investing. If the interest you pay is for example 18%, and the expected performance of a mutual fund is 8%, would pay the debt best business to invest in the fund. Similarly, who has been retired and need all the income to pay your expenses may not be investing in the stock. In general, who need to use the money before 10 years may not be investing in the stock because recent experience has shown there may be dramatic fluctuations. Hence those who are nearing retirement or who need the money in the next 10 years should take a conservative approach when it comes to investing in stocks. Conservative can mean investing a small percentage of the capital.

For all the above, consult a financial adviser would be a financial institution.

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