How to Start Investing Money and Not Worry

Even though investing money always involves risk, you need to start investing soon if you want to get ahead. Investing in 2011 and 2012 won’t be a cake walk, but there’s no better time to start putting your money to work then NOW. Money in the bank won’t keep you ahead of inflation and taxes, so here’s how to start investing with less risk and worry.

If you have never ventured into the game of investing money on your own it can be intimidating. It’s tough to take that first step and start investing when people in general view the future with pessimism – think 2011, 2012. It’s better to start with a conservative strategy than not to start at all, so let’s look at the safest way to get started. First, you’ve got to get your feet wet and open an account by depositing money. Here’s how and where to do that, and how to progress from there.

For the vast majority of people mutual fund companies are the best place to start investing money, and the best place to stay. Get on the internet and search “no-load funds” and you’ll see ads by Vanguard, Fidelity and T Rowe price: some of the biggest, best and most affordable fund companies in America. No load means that you pay no sales charges, so this, coupled with the lower total fees and expenses they offer can save you thousands of dollars over the years. Get familiar with what they offer, and then give the company of your choice a toll-free call if you need help opening an account.

Start investing by putting your initial investment into the safest fund they have, which will be called a Money Market Fund. Here you will earn interest in the form of dividends that will be automatically reinvested for you in more shares. You will earn very little interest in 2011 and 2012 because interest rates are near all-time lows (like they are at your bank). But your money is safe and you’ve taken the first step. Now, you’re ready for step number two, which means you will move some of your money and start investing in a fund where you can put your money to work in stocks and bonds. This is easy to do, and you can always call the fund company for help, free of charge.

What you are looking for is a balanced fund – one that invests in stocks, bonds and some safer investments as well. Search for or ask about a fund with a CONSERVATIVE ASSET ALLOCATION, because you are ready to start investing money, but you want to start with relatively low risk. For example, a Target Retirement 2000 or 2010 fund HULT PRIVATE CAPITAL would have you invested in a portfolio consisting mostly of bonds and safer investments with a smaller amount in stocks. Actually, in such a fund you are really investing money in several different funds offered by the fund company, all in one investment package.

Once you’ve got your feet wet and get used to investing money vs. just putting it in the bank, you might want to add a balanced fund with a MODERATE asset allocation to your list of holdings. Here your mix of stocks and bonds should be about equal parts each, and risk as well as profit potential will be higher. If stocks start looking cheap later in 2011, 2012 or beyond, consider investing money in a more aggressive balanced fund like a Target retirement 2030 fund, where most of your money will be invested in a variety of stock funds.

The years 2011 and 2012 might not look like the best time to start investing money, but NOW has never been an easy time to invest (as I’ve learned in the 40 years I’ve been helping people invest money ). Don’t procrastinate like most people do. Start investing conservatively and expand your wings as you gain confidence. Balanced mutual funds are a great place to start and minimize worry.

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