Magic word: diversification

Magic word: diversification. This difficult phrase is nothing but the pursuit of such a diversification of investments to reduce the risk of a slip-up. In the broader concept of diversification is to not put all your money to the funds, some hold on deposits. In a narrower concept, it means not to put all your money into one fund, but select at least two. The importance of geographic diversification means that you should - if possible - to choose such funds, one of which invests money in the U.S., and the second - abroad. But diversification is not only a suitable portfolio. It is also spreading the investment over time (regular payments instead of one-off). As you can see diversification in investing is so important that the greater number of meanings will be applied in practice, the safer for you.

Invest with a force of peace.

Do not worry, when you read in newspapers that the slump is coming, and within one day of your fund lost 3 or 5 percent. I do not get euphoric when everyone screaming that the great bull market coming. Quietly do your thing - buy a bit of new shares. It is a small chance that as a customer you are able to outsmart the stock market fund shivering sharks share prices. Much more likely to respond before you finish - the tendency to suddenly turn and lose money.

Invest regularly

Invest regularly. Over money to the fund from time to time a certain amount. Avoid the entrance to the fund with all the money "on the hill." By paying a fixed amount, automatically reduces their risk - in good times, you buy less expensive for her "building blocks", and the bad - more cheap.

Invest long term

Invest long term. In the few dozen years to invest in the stock market - either directly or through funds - should bring higher returns than keeping money on deposit. About this I have already written a few paragraphs earlier. Now only will clarify why I think so. Well, the stock market is invested in companies that - if well managed - they have higher and higher profits. On the stock market there are also more and more new and attractive "raisins." In the next few months if the shares are much dancing, but in the long run is likely to give to earn better than a deposit.

Risk and investments

The investment does not avoid the risk that something goes wrong. Do not avoid a temporary loss. In the long run - I am deeply convinced of this - you go out on the right. But under some conditions. You should observe the fundamental principles of prudent investing, some of which derive from the psychology of the markets (on which I mentioned last week: do not get carried away, avoid the "mental accounting" profit and loss, do not guess the best moment to invest), and others - with the usual Statistics

Investment funds

Investing in bonds, stocks or other securities requires knowledge and time. You have to keep track of the market situation and try to predict how much these securities may be worth in a week, month or year.
There is, however, this form of investing in the capital market, which allows you to entrust our money experts - investment trusts.

Has a capital investment fund consisting of contributions made by its participants. This capital is invested in securities or other assets (eg deposits, currency or real estate).

Investment funds are managed by companies of investment funds, they employ investment advisors, or specialists who monitor the market situation and make decisions on what funds to invest funds to generate profits.

To invest in the selected investment fund acquires the so-called investor. units. They constitute the legal title to participate in the income earned by the fund. These units are valued every working day and at any time we can buy new or to require the redemption of the fund at the current valuation (quotation units)

The benefits of investing in mutual funds:
 use the services of experienced professionals
 diversification of the portfolio (choose the type of investment fund)
 efficiency investments (the fund invests in various financial instruments)
 liquidity - the units can redeem (sell) at any time, so we have quick access to our money

What is investing ?

Investing is an active action aimed at raising capital and opening new perspectives, but burdened with the risk depending on the scale and form of the investment project.
Most popular ever - although this trend is changing - a form of investing is to invest their money in the bank. It is a form of safe investment but low interest rates on deposites
The market offers investors a range of other investment opportunities, such as:
 stocks and bonds
 Real Estate
 business
 Investment funds
 life insurance or insurance for the child's dowry
 others such as currency, gold, artwork, antiques, etc.