How to Start Investing

There is a whole lot of information available, giving you advise on where to invest and how to start investing. However, many a time, first time investors are being overlooked and it is assumed that every one who wants to invest knows a lot about investing. You may be excited at the prospect of investing, but always remember that, there is nothing such as quick money out of your investment.

The first thing that you need to keep in mind while investing is that, you need to make long-term plans, though there are a few short-term investment options available. You need to understand how to start investing and what to invest in. Usually first time investors feel that investment is something similar to a lottery or gambling. To an extent that is true, but people who gain a lot within a short period of time tend to lose fast as well. So it's always better to invest consistently over a period of time so that you are financially secure in the long run. Time is of utmost importance, and you should be ready to invest your money for at least 10 years. Before you even think of investing, make sure that you have paid off all your debts, be it loans or credit card dues. Some of the investment options available are stocks, real estate, mutual fund and gold. Now let's take a look at these options in detail.

Investing in Stocks
Investing in the stock market is one of the best options available. You don't need some extraordinary knowledge for stock investing. The only things required are discipline, loads of patience, an analytical eye and of course some basic mathematical skills. Along with these try to understand the market trends, the fundamentals and the balance sheet of the company, and some knowledge of accounts.

The next question that would come to your mind is why invest in stocks rather than rare coins and bonds. The simple answer to this is that there are chances of high returns if you invest in stocks and over a period of time there is no other investment option, other than probably real estate, which performs better than stocks. However, the main disadvantage of investing in stocks is that it is extremely volatile and its value may plump to an extremely low-level within a very short period of time. That's the reason it's important to try to invest in the long run.

Investing in Real Estate
Most people consider real estate investment a better option. The best part is that the value of real estate often appreciates over time. However, if you think of buying a real estate as an investment option, there are a few things to be pondered upon.

• The most important thing to remember if you are investing in real estate is its location. Now, why is location important? Because if you buy a popular spot, the chances of it getting sold with a good return is higher.
• A real estate property near a school is one of the most sought after.
• If you can buy a property near commercial areas like theaters and shopping malls or near playgrounds, parks and libraries you would get a better return irrespective of the current economic scenario.
• Also look for places close to bus line and light rail terminals.

It's important to remember that there are a few downsides of investing in real estate. They are:

• Though the assurances of good return is high, it takes a long time for the value to appreciate.
• Being insolvable, real estate properties takes a lot of time to sell. So if you need money quickly, it can be a potential problem.
• The taxes you need to pay for owning a real estate property is high and so the margin of return gets diminished. However, this is the case with all other investments.

Investing in Mutual Funds
Investing in mutual funds is considered to be the most stress-free and easy way of investing in the market. They are managed by professionals who keep monitoring the bonds and stocks in the portfolio of the fund. There are professionals who provide mutual funds investment advice, so it's always better to consult one before you start investing.

The money you invest is used in buying different kinds of securities. You are paid a dividend from time to time depending on the profits of the company. There are several advantages and disadvantages of mutual funds, so weigh your options before investing. Take a look at the prospectus which comes along with mutual funds to get a clear idea about the mutual fund ratings and the growth versus value ratio.

Always invest in a company which suits your style and investment criteria. For example, you may choose to invest in a blue chip company or a start-up company depending on the duration for which you want to invest. Read more about:

Investing in Gold
Several experienced investors have started gold investment, as they have realized that it not only gives better returns but also decreases the risks associated with investing. Here are a few instructions which you need to know before investing in gold:

• Decide what percentage of your money you would like to invest. Usually people allocate about 5% of total money for investing in precious metals.
• Try purchasing gold from banks and deposit them in bank safe deposit boxes. You can also opt for buying gold bullion.
• You can also purchase shares of gold processing or gold mining companies. Buying the shares of these companies provide a safer alternative than buying gold in the physical form.

Thus, before you start investing make sure you have taken into consideration the risks associated with different types of investments.