Opening an Investment Account
Have you ever thought about playing the stock market? Many of us
dream of hitting it big by investing $100 and earning $100,000
within a few years. But the system doesn't work that fast.
Generally speaking, the market will continue to pay dividends
over time, but the path may get bumpy and you could even lose
part of your investment in a bear market. Never invest more than
you can afford to lose.
The flip side of investing is that many people have earned
comfortable dividends that built a retirement fund, put kids
through college, or financed a new home. However, it takes time
for an investment fund to grow, and the sooner you start, the
better. Here are some tips for opening a fund that could pay off
big as time goes on.
1. Start young. Open an investment account for your children
and continue adding to it as they grow. Although you may want to
maintain bank savings accounts as well, an investment fund is
apt to grow more quickly and can provide needed funding for
their adult years. Ask relatives to consider giving mutual fund
shares as gifts instead of an overabundance of toys or clothes
that won't get worn. A person who invests $2,000 by age twenty
may have nearly $100,000 at retirement age.
2. Make automatic deposits. Set aside $25 to $50 each month for
your investment account. You can have it deducted automatically
from your paycheck so that you never see or miss that money.
When you get annual raises or bonuses at work, consider adding a
portion of those amounts to your investment fund, as well.
3. Choose a responsible broker. Do an online search or contact
the Better Business Bureau to find a suitable agent to handle
your account. Make sure that the person is someone who is
willing to keep you informed and who shares your values and
philosophy on investments. Schedule an annual consultation with
your agent for a review of the previous year and a preview of
the year to come in terms of what you might expect from your
investment's performance.
4. Take an investment class or at least buy the book. Learn
something about the way the stock market works both in your
country of residence and the world economy overall. Don't become
wholly dependent on an agent who may not be able to fully
explain your account or plan strategic moves without your
permission, which requires either your understanding or your
trust.
Be patient. The stock market can play funny tricks on
investors. Prices soar and plummet by turns, and your investment
may look great one day and dismal the next. Keep in mind that
the general performance trend since the market began is to pay
out consistently over time. Don't panic when conditions get
rough. Hang in there and stay cool, and you will likely be glad
you did.