How to Invest Money Smartly

As with most money-making ventures, investing works best if investors have developed certain plans or strategies. Not sure how to invest money smartly? Here are some investing tips that new investors can look into before parting with their hard earned money.

Diversify Investments

Not all investment products and market sectors perform in the same way. Some do exceptionally well while others have dismal performances in the same economic climate. That’s why it’s important for investors to diversify their investments. Ideally, spread the risk by having secure cash or fixed interest investments for a modest return over the short term as well as investing in shares and property for higher returns over the long term.

Investors can also diversify further by choosing different investments for each asset class. For instance, shareholders can buy shares from different companies across different sectors or even international stocks.

Invest for the Long Term

The best way to invest money is to plan it for the long term. It’s time in the market, not the timing in the market, that really counts. In other words, don’t invest based on hot tips from the neighbor’s uncle who made a profit recently by following his sister-in-law’s hot tips. Instead, develop a sound investment plan and stick to it. The longer an investor keeps his investments, the more likely he will ride out market highs and lows.

A good investment strategy is through dollar-cost averaging, a technique of buying a fixed dollar amount of a particular investment on a regular basis regardless of the share price. This means more shares are bought when prices are down while fewer shares purchased when prices are up, giving the investor a lower overall cost for buying shares over a period of time. If possible, try to set up an automatic investment plan to make the most of dollar-cost averaging.

Inveting Tips

Resist Stock Speculations

Many inexperienced investors hope to make a quick profit through stock speculations. This often turns out to be a costly mistake. A better strategy is to invest in quality assets that will appreciate in value over time. Favor steady and well-established blue chip stocks instead of risky hot speculative stocks that may rake in high returns.

Additionally, try to invest in assets with the tendency to do well even when times are bad.

For instance, in Australia, supermarket and food manufacturers are known to have good track records even during downturns. So shares offered by these companies may make good investment products.

Know that Investment Markets Run in a Cycle

Remember that investment markets run in a cycle. A financial boom that has continued for a few years will always end with a downturn. When things are bad, they can only get better. The economy will slowly recover, peak again only to be followed by another downturn. It will be an endless cycle. The trick is to be prepared for the bad times and then be ready to actively participate in investment plans when another boom period starts.

To invest money smartly, diversify investments across different asset classes and different market sectors. Also, aim to invest over a long term, resist stock speculations and understand that investment markets operate in a cycle.

How to Invest Money Smartly: Investing Tips for New Investors

As with the majority of money-making ventures, monetary investments work best if investors have managed to come up with some plans or strategies. You aren't sure on how to invest money wisely? Well, here are some investing tips that you can look into before parting with your hard earned money. In this article, I will share with you some tips on how to invest your money in the stock market.

Diversify Investments

Not every investment product performs in the same manner. Some may perform exceptionally well, while others may have dismal performances in the same economic climate. This is why it is important for investors to diversify their investments well. Ideally, you should try to spread the risk by having fixed interest investments for a modest return over the short term as well as investing some of your money in shares and real estate for higher returns in the long run. 

Investors can also further diversify their investments by opting for different investments for each asset class. For example, investors can choose to buy shares from various companies across different sectors or even international stocks. 

Invest for the Long Term

The best way to learn how to invest money in stock market is to plan your investment for the long term. It's the time and duration of exposure in the market that really matters. In other words, you should not be investing your money by following some hot tips given by your neighbor's aunty who made a profit recently by following her brother-in-law's hot tips. Rather, you should develop a sound investment plan and stick to it. The longer an investor keeps his investments, the more likely he/she will be able to ride out any market highs and lows. 

A good investment strategy is by practicing dollar-cost averaging, which is basically a technique of buying a fixed dollar amount of a particular investment on a regular basis regardless of the share price. This means that more shares are purchased when prices are down while fewer shares are bought when prices are up, thus giving the investor a lower overall cost for buying shares over a specified time frame. When possible, you should try setting up an automatic investment plan to fully utilize the concept of dollar-cost averaging. 

Resist Stock Speculations

Many inexperienced investors aim to make quick profits through stock speculations. However, this usually turns out to be a costly mistake. A better strategy will be to invest in quality assets which appreciate in value over time. It is better for you to invest your money in well-established blue chip stocks rather than risky hot speculative stocks which are highly volatile. Also, you should try to invest in assets that have a track record of doing well even when there is an economic downturn. 

Know that Investment Markets Run in a Cycle

You should always bear in mind that investment markets run in cycles. A financial boom that has lasted for a few years will inevitably end with a downturn. When things are bad, they can only get better. The economy will gradually recover, eventually peak again only to be followed by another downturn. This is pretty much an endless cycle. The trick is to be prepared for the bad times and then be ready to actively participate in investment plans when the next boom period begins. 

When you learn how to invest money smartly, it is always recommended that you seek to diversify your investments across different market sectors and different asset classes. Also, you should aim to invest for the long haul and understand that all investment markets operate in a cycle. 

Investors Alert: How To Avoid Fraud Scam

How To Avoid Fraud

Your net worth might make you a target for scams. Scam artists don't care how you have come across your money. They don't care whether you worked hard all your life to earn your money, or whether you hit the lottery the first time you played. It is your money they want. The only thing that may stand between a fraudster and your money is your preparedness when you are approached.

What can I do to avoid being scammed?

Ask questions and check out the answers. Fraudsters rely on the sad truth that many people simply don't bother to investigate before they invest. It's not enough to ask a promoter for more information or for references - fraudsters have no incentive to set you straight. Savvy investors take the time to do their own independent research.

Research the company before you invest. You'll want to fully understand the company's business and its products or services before investing. Before buying any stock, check out the company's financial statements on the SEC's website, or contact your state securities regulator. All but the smallest public companies have to file financial statements with us. If the company doesn't file with us, you'll have to do a great deal of work on your own to make sure the company is legitimate and the investment appropriate for you. That's because the lack of reliable, readily available information about company finances can open the door to fraud. Remember that unsolicited emails, message board postings, and company news releases should never be used as the sole basis for your investment decisions.

Know the salesperson. Spend some time checking out the person touting the investment before you invest - even if you already know the person socially. Always find out whether the securities salespeople who contact you are licensed to sell securities in your state and whether they or their firms have had run-ins with regulators or other investors. You can check out the disciplinary history of brokers and advisers quickly - and for free - using the SEC's and FINRA's online databases. Your state securities regulator may have additional information.

Be wary of unsolicited offers. Be especially careful if you receive an unsolicited fax or e-mail about a company -- or see it praised on an Internet bulletin board -- but can find no current financial information about the company from other independent sources. Many fraudsters use e-mail, faxes and Internet postings to tout thinly traded stocks, in the hopes of creating a buying frenzy that will push the share price up so that they can sell their shares. Once they dump their stock and quit promoting the company, the share price quickly falls. And be extra wary if someone you don't know and trust recommends foreign or "off-shore" investments. When you send your money abroad, and something goes wrong, it's more difficult to find out what happened and to locate your money.

Here are some red flags warnings of fraud:

• If it sounds too good to be true, it is. Compare promised yields with current returns on well-known stock indexes. Any investment opportunity that claims you'll get substantially more could be highly risky. And that means you might lose money.
  
• "Guaranteed returns" aren't. Every investment carries some degree of risk, and the level of risk typically correlates with the return you can expect to receive. Low risk generally means low yields, and high yields typically involve high risk. If your money is perfectly safe, you'll most likely get a low return. High returns represent potential rewards for folks who are willing and financially able to take big risks. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are "guaranteed" or "can't miss." Don't believe it.
  
• Beauty isn't everything. Don't be fooled by a pretty website - they are remarkably easy to create. If you'd like to see what an online fraud looks like, click here.
• Pressure to send money RIGHT NOW. Scam artists often tell their victims that this is a once-in-a-lifetime offer, and it will be gone tomorrow. But resist the pressure to invest quickly, and take the time you need to investigate before sending money. If it is that good an opportunity, it will wait.

Con artists are experts at gaining your confidence. So be certain to treat allunsolicited investment opportunities with extreme caution. Whether you hear about the opportunity through an email, phone call, or a fax, be certain to check out both the person and firm making the offer and the investment they are pushing.

Remember - an educated investor is our best defense against fraud! For more information on how to invest wisely and avoid fraud, please visit theInvestor Information section of our website.

http://www.sec.gov/investor/pubs/avoidfraud.htm