Navigating the tough investment market

The Latin phrase scientia potentia est effectively translates to “knowledge is power.” When it comes to the art of investment, this is probably one of the most important phrases to remember.

When stepping into the investment world, it’s essential to really understand the ins and outs. It’s a tough and complex environment, and without the right preparation, a person is more likely to sink than swim.


Taking advice

Those who are new to investment but want to take the plunge need to not only build up their own knowledge but also know when to seek advice. Knowledge can be gained by reading books, journals, and magazines as well as by visiting a number of reputable websites that contain investment information and advice.

One such website is TheStreet, a source to which finance professional and writer Todd Bliman brings his expertise to bear on a wide range of investing topics. He works for Fisher Investments, and his writing provides a helpful overview of the whole investing field.

For new investors still finding their way, it may be worth considering using a professional investment firm that can give advice and help build up a portfolio.


Why invest?

Investing is all about making money—or it should be. Of course, there are those who lose money, and most investors understand stocks can go up or down. This is where knowledge and experience is key to becoming a successful investor. Creating wealth for a business or an individual is what makes the world go ‘round. It helps businesses to grow, provides individuals with money for retirement, and is a major part of how the financial system works.


Types of investment

Ownership investments cover a range of options, in which money buys something that is expected to produce a profit. Stocks, through which a portion of a company is bought and the stock owner has the rights to a share of that company’s value, are probably the most common investment. If the stock goes up after purchase, the shareholder can make a profit by selling it.

Starting a business is an investment in itself. If that business becomes hugely successful, enormous financial gains can be made, both for the business owner and for those who have bought stock in it.

Another investment possibility is real estate, the process of buying, repairing, and renting or selling houses or apartments. These types of ownership investments carry a certain amount of risk, but if handled properly they can gradually build up a significant amount of money to be reinvested.

It is a good idea for an investment portfolio to include several different levels of risk. While real estate represents a higher risk, bonds are a low-risk venture in which the investor effectively lends money to a company or government and is in most cases paid back with interest. Whatever the type of investments made, it always pays to understand exactly what each option has to offer in relationship to the risks being taken.


Navigating the tough investment market