Learn How to Invest

While the recession may or may not be over, most financial experts agree that this is the best time to invest. Yes, the market could still decline, and there is no indication that the the worst days are over, but in general, this is the best to invest - if you know how to invest, that is.

Knowing how to invest is not some secret formula. In fact, if someone does claim to have a secret how to invest and get rich quick formula, you should probably run the other way, don't walk. Investment will always carry with it some risk. It is possible to get rich overnight, but incredibly unlikely.

When you approach the question of how to invest, you should be considering, first, foremost, and only, the long-term. Hot stock tips are helpful for experienced traders, but those are also the people you see bankrupt in the Wall Street Journal a few years later. Make no mistake about it; the stock exchange is gambling; unless you give in to the inherent nature of it.

Knowing how to invest means believing in compound interest and long-term growth. Understand that you are looking for profits 15 or 20 years from now; that is how money is made in the stock market for you and I.

Here is the way I know how to invest; follow along if you think it will be helpful. The first thing I do BEFORE I invest is to save. Whatever percentage of my monthly income I devote to investments, I put have in a CD, or other longterm, locked-in, savings account; whatever yields "high" insurance. FDIC protects this up to two hundred and fifty thousand dollars, so there is no plausible way you could lose this money. After this, I tend to look only for indexes. Indexes minimize short term risk and reward in favor of growth over a 15 or 20 year period.

There are many ways how to invest, and no matter who you listen to, including me, think about what you want when you invest. It is too easy to say, "I want to make money and be rich". What, exactly do you want to do with the money? Buy a house? Retire? Send a child to college? Set realistic goals, and it is surprising how investments with realistic goals and risk-assessing will help you reach the life you want.