Hello everyone! I hope you are having a wonderful day. Today we are going to talk about investments!
I am, by no means, an expert on stock investments, but basically my strategy right now is to have a certain amount of money in my savings account I know that I can access it at any time so that if something bad happens to me or if I can not make any more money, I still know that I can pay the rent, feed myself, and that I am financially secure. So, step one is to set aside an emergency fund. Second, if you have debt to pay off, start with the highest interest rate and third, we leave the money for investments. An investment is an asset or item acquired with the goal of generating income or appreciation. Appreciation refers to an increase in the value of an asset over time. When an individual purchases a good as an investment, the intent is not to consume the good but rather to use it in the future to create wealth. That's money you do not need to access right away. The basic investment strategy is do not put all your money on one card. Please do not put all your money in one company. So, a stock is a form of security that indicates the holder has proportionate ownership in the issuing corporation. Corporations issue (sell) stock to raise funds to operate their businesses. There are two main types of stock: common and preferred. I also like to invest in a socially conscious fund that has a mix of companies that either have really good environmental practices, use fair trade practices, provide health care to their workers, etc., and that also makes me feel good about investing. I have also put some money into bonds, which tend to fluctuate less, but also yield less. A bond is a fixed-income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. So in summary, stocks tend to offer more risk and more return, while bonds tend to offer less risk and less return. A quick extension of this fairly simple statement, but basically the mix of stocks and bonds you invest in depends on your risk tolerance. So if you are younger and not yet planning to retire and will be withdrawing the money for a while, you can generally tolerate higher risk and therefore invest more heavily in stocks, whereas if you are a little older, middle-aged, you should shift your investments more heavily into bonds as you approach retirement when you will be withdrawing most of your money.
My last and probably most important piece of advice is that you should not watch the stock market every day. If you have money invested, invest it and leave it. Since I started investing money a few years ago, there have been a few instances where I was a little spooked, but I did not pull my money out of stocks and lo and behold, a few months later the difference was made up. If you freak out at every little bump, you will probably lose money. However, if you keep your money in the market over a very long period of time - we are talking decades here - the market shocks even out, and over a long period of time you usually get a return on your investment.
That's just my super-ultra basic knowledge of investing. Also, I thought I'd write this post because I do not see a lot of young people, and especially young women, talking about how to invest money. So I hope it's a little push for you to do your own research and find your own investing strategy.
XO
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