Philosophy investing for beginners
Here is the new article investing “Philosophy investing for beginners“. Hope you are enjoy reading this article.
The investment is anything but simple. There are thousands of equity funds out there, offering hundreds of companies. And that’s just for one type of investment (stock)! The investment world can be so complicated that we throw our hands up in defeat. I remember feeling overwhelmed at first.
I know it is important to save and invest for the future of my family, but all the options out there, I have hoped. Stocks, bonds, REITs, TIPS, index; mutual … the names and acronyms relentlessly kept coming. So I put to work and learn (and still learning) about all my options. And guess what I found! Most investment options are useless for me, the average investor.
How does a person, trying to get the most benefit for the least amount of effort to invest for their retirement? Let’s look at some basic assumptions required when investing in the stock market long term. Diversification is key.
To have a portfolio of winning, we should not put all our eggs in one basket. When it comes to stock investing, there are many baskets can put our eggs: stock funds, bond funds, REITs, advice, etc, etc.
The list goes on and on, but minimalist knows there should be a few of them to do the most work done. In fact, there are two main asset classes needed for a well diversified portfolio: stocks and bonds. Stocks have historically been the best long term results, but very volatile. Bonds, by contrast, have a lower rate of return, but much more reliable.
The portfolio should be more conservative with time. A child has an investment horizon (until retirement) will invest more money in their stocks and bonds lower. As you get older and time is about using the money invested, the investors to convert their reserves in bonds. These are two of the most important principle to start investing. Remember to diversify and make safer investments as you age.
Attempt to spread the idea of bite size in the world. I like normal people like you and me to learn how to live happier, healthier, and financially secure.