Wednesday, February 25, 2009

Is the Stock Market where I should Invest?

By Samantha Asher

Do you have some extra cash lying around doing nothing? Do you want to make more money than you are making at your job? Even if you don't have cash at the moment, you can save some up and start investing. Start investing and you can start making more money.

There are many different ways to invest money. Which should you choose? You can invest in stocks, bonds, mutual funds, commodities, derivatives, real estate, currency, money market funds, or you could lend it to your unstable cousin. Most of these will probably make you some money, but some will earn you more than others. Why should you choose to invest in the stock market over the other investments?

Stocks over bonds is almost always a guaranteed higher return. The historical return of the stock market is about 10 to 13%. That means that if you invest over the next 30 or so years in the stock market, on average you'll earn between 10 and 13%.

If you invest in bonds or certificates of deposit, you won't make nearly as much. Even if a good economy, you can't expect to get much more than 6% from a CD. Invest in the stock market if you really want to make your money grow.

Stocks generally carry more risk than bonds. Of course, we are talking about high rated or government bonds. Low rated bonds, also known as junk bonds, can earn a high return, but they are very risky, usually riskier than a good stock. Even with the extra risk in the stock market, you can keep your money safe with diversification.

Stocks are also pretty easy to invest in. There isn't a lot you need to know. Unlike commodities or derivatives, you can learn all about stocks and really understand them without extensive research and education. Sure, you can understand derivatives, but stocks are much easier and can often earn more.

It's likely that you have never even heard of a future or option until you read this article. If you do know what they are and love dealing with them, then go right ahead. Technically you are still dealing with the stock market.

If you really want to make a lot of money, invest in the stock market. You can make a lot of money with minimal risk if done right and without complication. You can even get started as soon as you want. - 15224

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