How Should You Decide Where To Invest Money?

The answer to this question of where to invest when you are only starting to invest really comes down two main things. And these two things are 1) the time horizon for your goals with investing and 2) how much risk you’re willing to take in your investments.

There are a lots of things you need to know about investing to decrease the risk of losing money or doing wrong investments which may lead to a lots of stress in your life and bad experience with investing. The knowledge of beginner investments involved of course How to Invest in Stocks and maybe Things To Know Before Starting Investing. But lets just take baby steps and make sure that you understand each topics as they come just to not confuse you more than you might be.

What I mean with the time horizon for your goals with investing is basically that, if you are investing for a long-term goal, like retirement or for you kids college expenses which will happen 10 years from now. Then you should probably be investing primarily in stocks. Before you invest in stocks do your research and make sure that you read also Are Stocks A Good Investment For Beginners?

The reason behind why you should or consider investing in stocks if you have a long term goal involved is that investing in stocks will allow your money that you invest to grow and outpace inflation over time. And as your long term goal gets closer to be real you can always slowly start to dial back your stock allocation.

But if you are investing for some short-term goals which is less than 5 years ish, you should probably don’t invest in stocks and turn to bonds or funds which will be much better for you than stocks for the short run. 

The second thing which I mentioned above is your risk tolerance. You have to know that the stock market goes up and down all the time no matter what. So if you are prone to panicking when things go south then you should probably invest in slightly more conservatively and take less risk than some other people might do. And maybe bunds or funds will be a better option for you than stocks because bunds and funds are more stable than stocks and there is less risk with bunds and funds than there is with stocks. 

READ ALSO

What Are The Best Stock Market Investments?

How To Open A Brokerage Account And What Is It?

You Can Find My Investing Portfolio Here

9 thoughts on “How Should You Decide Where To Invest Money?

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