Investing 101

If you have all of your cash loaded into your savings account, chances are you’re making miniscule interest… and not much else.

There are plenty of opportunities available for making an extra dollar, and let us assure you, you have to step away from stashing it all in the savings account.

Here are our top  tips for good investing, to help you make your way through the market and build your savings over a long period.

Figure out what you want

Take a moment to define your life goals. What do you want? What are you looking for? What are you aiming towards?

If you take some time to determine what you want out of life, establishing financial objectives will become a lot easier. The eyes will be on the prize, and the money that you save will get you there. Don’t put money where you aren’t sure you need it. Sure, you might want to save some for the kids’ education funds… but work with your kids so they are saving, too.

Research

When investing in companies, look for ones whose products and/or strategies you agree with. It is important to research and understand what companies and investments you are making before you do it. A word of advice: past performance is no guarantee of future performance, but strong past performers, especially in the last year, tend to be consistent. Read magazines, such as Forbes.com, to stay in the know.

Find a Financial Adviser

And not just any financial adviser. One that knows all there is to know about investments and taking care of money. Good companies  are filled with the best and the brightest, and rank as a top money manager with an industry-leading sales and service organization. If you’re an adviser, consider thriving at a new company, too, and check out Fisher Investment careers.

Find out your risk intolerance

Rutgers University’s New Jersey Agricultural Experiment Station offers an Investment Risk Tolerance Quiz, which can give you an indication on what your risk tolerance is. If you find yourself worrying about the markets, and stressing over the small stuff, reduce the risk on your portfolio. Only do what you are comfortable doing.

Diversify!

Instead of throwing everything into one pot, invest in a number of stocks in different markets, as well as in mutual funds, bonds and other investments. Follow the good rule of thumb that no stock or investment should be over ten percent of your total portfolio. Also take the time to explore different geographic areas, such as the US, Canada, Europe, Asia and other emerging markets. By doing this, it should give you protection against a collapse in any lone sector.

Set aside for emergencies

Be sure to establish an emergency fund. When starting, use a safe investment, such as a money market account or a money market mutual fund. Then, set aside an emergency fund. Don’t count on cash advances or loans – the interest rates will be astronomical.

When investing your money, take the time to do it right and carefully. Your bank accounts will thank you.