The cost of living nowadays is going up rapidly due to the rise of energy and food prices. Unless you have a rock-solid pension plan, you will need to invest in order to increase the security of your nest egg. But not all of us has studied finance in college and has a lot of time for deep analysis on investment markets. For most types of investments, especially stock-market trading, if you don't spend several hours a week working on them, it is not much different from playing poker. So how can we invest wisely even if we don't have time to analyze our investments? Here are some suggestions:
1. Create a solid plan
Plan your investments carefully. Try to diversify your investments across a broad class of stocks and bonds. A typical scenario is approximately 60% in stocks, and 40% in bonds and money-market accounts.
2. Once your plan is in place, just sit back
The stock market constantly rises and falls. When you see it falls, don't freak out. Chasing the winners of the moment every single day would drive you crazy. Maybe check on it once or twice a year. If the stock market dives down horribly, just take a little bit of your funds out of it and relocate it in bonds.
3. Try to beat inflation
Manage your money-market accounts wisely even during inflation by shopping around for high yielding CDs, switching to tax exempt-funds, and buying government bonds with inflation protection such as I Bonds and Treasury Inflation-Protected Securities
4. Contribute more to your retirement plan
When it comes to retirement planning, one of the biggest mistakes you could do is not contributing enough to your 401(k) or IRA account, especially when your employer offers matching funds. If retirement is approaching you, don't make a silly blunder by easing off your savings.
5. Accept risk
Risk may not be what most people want, but sometimes it is inevitable, and often it goes hand in hand with return. Without risk, there is usually just little growth. Keep this in mind and sleep tight.
Useful Links
- Bankrate.com
- A great site where you can compare bank rates around the country.
- Retirement Planning - 401(k) Guide
- Learn about different types of 401(k) plans and how to manage your 401k smartly.
- CNN Money
- A very insightful and reliable stock-market site. MONEY Magazine Editor, Michael Sivy's weekly stock picks and forecasts.
- Home Improvement Grants and Loans
- Save money on repairing your home by applying for a government grant or low-interest home improvement loan.
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