Topics: Stock market, Stock, Investment Pages: 5 (1809 words) Published: February 13, 2013
Investing is the process of making your money work for you, instead of simply sitting safely in the back, and it is increasingly a necessity of modern life. It is frequently no longer possible for an individual to work in one job all their life and retire on their pension. People move from job to job, or from career to career, and due to government cutbacks the responsibility for providing for their retirement falls increasingly on the individual. By investing your money wisely you can make a profit that you can then re-invest or put aside as a nest-egg. A good return on an investment can maximise earning potential. Disadvantages

* The major disadvantage of investing is that it is always possible to lose money on whatever investment you make. If you invest in a rare collectible, the value of it can rise or fall depending on its popularity and its availability on the market. Stock prices fluctuate based on everything from how the competition is doing to public confidence in the market. 2008 demonstrated how even house prices, traditionally the most secure investment, are not a guaranteed return. Warning

* An investment shouldn't be a gamble. The investor should research the market where they are investing thoroughly before they ever decide to commit their money. Although there is always a risk that the vagaries of the market will result in the investor losing money, they should always have a reasonable expectation that they will make a profit when they make the investment. Whether you have just come into a large lump sum of money or have some money set aside to begin investing, there are a variety of ways to go about investing your money. It is important to do your research prior to investing. There are some mainstream ways to invest that can work, but you should always weigh the risks with the probable gains. Company Stocks

Investing in a company by purchasing shares through a stockbroker is one of the most popular types of investing. Each share represents your small portion of ownership of the company. Although you can make decent money after you sell the shares when the value goes up, you can also lose a lot of money if the company does not do well and the value drops. Investing in Bonds

Another great investment option is that of a bond. Private companies and governments issue bonds. When you buy a bond, you essentially provide a loan to the private enterprise or the government issuing it. In return, you earn a fixed monetary interest, according to the coupon, after a fixed maturity period. Treasury bonds or notes issued by the government are the safest investment options, with low but guaranteed yields in the long term. A riskier, but high yield option is buying bonds offered by private companies, which are traded on the bond market. The returns on these bonds are subject to the performance of the issuing company. A person should research the bond market and study the risks involved before investing. A treasury bond is always a good investment, but it has a long maturity period.

Certificate of Deposit
Other than bank accounts banks also offer 'Certificate of Deposits'. Under this type of investing, the banks offer a set interest for the amount of money you deposit with them for a set amount of time. The time span varies from case to case, but the general span is six months to two years. The banks offer decent compounded interest on your deposits. 'Certificate of Deposits (CDs)' is a time honored and time tested way of investing money. It is also one of the safest ways of investing money. Banks offer a higher percentage on fixed time deposits or Individual Retirement Account CDs (IRAs). Such savings accounts, certificates of deposit and treasury bonds are safe ways of investing money. Though the returns on such investments are less, they are preferred more because bank agreements and the Federal Deposit Insurance Corporation (FDIC) secure your money. Individual Retirement Accounts (IRAs) and 401(k)...
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