Office1000 Blog December Archive

What Investment Suits You?

By Blog Stories at 12/29/2008 23:45

Do you get to keep some of the money out of your monthly paycheck? What do you do with these savings? Do you just keep them in your old box at home and spend them during the Christmas seaason? Tell you what, if you want to have a good retirement at the end of the road, this is not the way to go. You are not saving anything, and even if you do, the purchasing power of your savings is reduced by inflation. Invest it in something profitable.

There are different kinds of investment vehicles the level of risk that you can tolerate and when you will need to use the investment (short-, medium-, and long-term) for spending. Here are just a couple of investment vehicles that you can try out:

• Bank savings accounts - Unless you have been living in Jupiter since birth, you probably know what a savings account is. Investments made here can be withdrawn immediately and they are relatively risk-free when it comes to growth of capital. However, if inflation is rampant, you will see your purchasing power getting reduced quickly due to the fact that interest rates for savings account are minimal.

• Mutual funds - These type of investments are for those who can invest money in the medium- and long-term with a minimal tolerance for risks and fluctuations in the market.

  Basically, investments you make in a mutual fund are handled by a fund manager, who, in turn, will invest the accumulated funds in a basket of investmend vehicles. The only downside to this is that investments made in a mutual fund are committed for a certain time. So you cannot withdraw them immediately when the need arises

• Stock Market - And, of course, we have the stock market. These type of investments are for those who are willing to invest in the long-term and to subject their investments in volatile fluctuations that may arise. In this type of investing, you buy your share of companies and help make decisions. These investments make the most profit, but they can be also very risky.

  Historically, stock markets have been said to gain profit to the tune of 10% annually, but this is subject to fluctuations and not indicative of future performances. Now, again, get your calculators and learn how much you will earn from this.

Now, do not limit yourself to these investment vehicles. There are a lot others out there. Just read and read and read before you jump with your money.