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Investing
Explained in 5 Minutes |
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by Grant
Bynum 1 2 3
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Are
you hearing all those stories from the stock market
about 100% annual returns? Are you ready to start
getting in on that? Before
you do, make sure that you understand some common-sense
basics about investing. Let us give you a few
simple steps to get started with investing.
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| Pay
attention if: |
You
are a beginning investor. |
| The
Plain Summary
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Build
an investment foundation with many types of investments
that have varying levels of risk. |
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FIRST
Minute: Figure Out Your Goal & Risk Sounds
pretty simple, doesn't it? But many novice
investors don't do it. Here's what we mean -
anyone can say that they want to "retire
early", "fund their children's
education", etc. But, you must assign a
timeline to your goal...because it will determine a lot
of other things about your investment
decisions. |
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You
must realize that higher investment equals higher risk.
It's would be great if each
of us could make 50% on our money each year, especially
in the stock market. But, let's get real.
The higher % of return that you are trying to make, the
more risk is going to be associated with that
return. Translate "risk" to be:
the risk of making less than a certain %, making no
money at all, or even losing some or all of your
money.
So, this is not to say that you can't
make a 50% annual return on your money...but it means
that this investment will be much
"riskier"...meaning that the chances of you
not making 50%, making nothing, or even losing all of
your money...is much greater. So, remember,
the higher the risk, the higher your chances of losing
money as well...don't be fooled.
| SECOND
Minute: Understand the "Investment Ladder"!
You
use ladders for getting higher...to scale
heights. With each ladder step that you
take, you get higher, but it's more dangerous
("riskier"). Well, think of
investing in the same way... So, let's proceed! |
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Understand
the Investment Ladder |
Next
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