Stock and bond investments made systematically are known to give fabulous returns to investors. The money earned through the route of appreciation in stock prices and dividends will help you to beat the rising inflation rate and save money for the future. Though investing in stocks for dummies is more risky than investing in bonds which always give fixed returns, stock research and consistent efforts will help you become an ace investor.
Investing in Stocks
When you first enter the stock market your goal should be to begin investing with a little capital. The suggestion here would be not to risk a high amount initially till you get sufficient experience and confidence. Investing in stocks for beginners requires preparation of a good investment portfolio consisting of stocks of companies belonging to varied sectors of the economy. The money should be allocated in small cap, mid cap as well as large caps by perfectly knowing the promoters, business model and future business expansion and prospects of the companies. Another reason you should invest in stocks is the receipt of dividends from profitable companies every quarter. As far as possible, new investors should avoid considering high risk stocks to invest in as they may not understand when the stock prices start tanking to new lows. Those who find it difficult to track the price of stocks and bonds can take help of financial and investment advisers and consultants. Stock investing is of two types - short term and for the long term. Identifying the best stocks to invest in is the key for success in capital markets. Long term investments will help you to beat the fluctuations in the stock markets which are very common. There are many tips on stock market investing for dummies on the Internet which you can refer to.
Investing in Bonds
Bonds are believed to be a much safer investment option than stock trading and investing. These are actually long term loans granted to large corporations - both government as well as private for expansion of business. In return, these corporations are supposed to give fixed percentage returns to the investors. This rate of return will not be changing even though the company does not make substantial profits in the time to come. Bonds are issued through a lot of advertisements which contain all the details regarding the business, turnover and sales and profits of the company. First of all, before taking any investment decision, you need to study the financial aspect of the company thoroughly and then invest your money. You should avoid investing in bonds of debt-ridden companies. Choose government run companies with sound fundamentals which have a promising future. Comparison in the form of bonds vs stocks will help you understand thing easily.
Investing in stocks and bonds has always been a profitable option for most investors. While the aggressive and risk taking investors can go for direct stock investments, the conservative ones can go for the mutual fund and bond investments. After all, proper financial planning and financial management does pay effectively in the long run. So, consider these options and secure your future now!
DISCLAIMER: This article is just for reference purposes and does not recommend any stock market investments.
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