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How Should I Start Investing

by The Urban Specialists 04/11/2021

Photo by 3D Animation Production Company via Pixabay

Have you received your 401K packet? It probably had some selections to make, such as a list of investment options to choose from. A small choice like this makes a big difference down the road. Whether you own a 401K, need to fund your own retirement, are putting a down payment on a home, or have some money left to you by a relative, there are some basic investment principles.

Stocks Are Still Your Best Bet

Every decade or two, the stock market tanks, everyone panics and some people say stocks are just a gamble. And if you get excited and buy in heavily while the Dow is nearing its peak, you will have a problem when the inevitable downturn comes. But consider this: since 1957, when the S&P 500 (an index of the top 500 stocks, a more accurate all-around market measure than the Dow) was established, its issues have returned around 9 percent a year. That’s despite a decade-long slump in the 70’s, the dot.com bust of 2000, and the “Great Recession” that started in 2008. If you’re in the market for another 20, 30 or 40 years, these setbacks are merely a dip in your long-term, upward progression.

Some other pointers:

  • Dollar cost average by buying small amounts regularly over time. If you’re in a 401K, this is automatically done for you. Don’t “buy high” by jumping on board when the market’s hot.

  • If you have a 401K, try to make the maximum contribution. If your employer matches, you’re turning down free money if you don’t.

  • Don’t get excited about what’s hot today. When stocks are low, some people say gold is a no-lose choice. It’s not. It will come down. In the late 90s, day traders were bragging constantly about their latest coup, investing in startups that had never made money and never would. It came to a screaming halt in 2000. 

  • Be careful of picking individual stocks. Few people beat the market average. Even professionals who manage funds don’t do well. Favor index funds. An S&P 500 index fund buys every stock in the S&P 500. It doesn't try to outguess the market. 

  • Financial advisers may come to you suggesting their favored investment. Be leery of anyone who presents a solution before understanding your situation.

Stick to a sound, steady plan and don’t get rattled by the noise around you, and you can build a comfortable nest egg over a lifetime.

About the Author
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The Urban Specialists

CITY RESOURCES The great thing about urban centers is just how much stuff you find around you. Your favorite restaurants, cultural activities and museums are within walking distance of your front door. It's convenient and adds to how much you get out of your place. For more info on New Haven, check out these links: Info New Haven Visit New Haven We are passionate about the environment. We are eager to help you to add value to your current home, save money on utilities, make your lives more energy efficient and eco-friendly, and generally live a "greener" lifestyle, all without sacrifice. For more info on green living in New Haven, visit these sites: CT DEEP Neighborhood Housing Services of New Haven USGBC's Green Home Guide We care about historic properties and their communities and wish to encourage preservation of our community's architectural and cultural history. For more info on New Haven preservation, check out these links: CT Trust for Historic Preservation New Haven Preservation Trust Historic Homes Downtown Areas Neighborhoods Green Homes Bethany Branford Guilford Hamden New Haven North Haven Orange West Haven Woodbridge Olivia C. Martson Olivia Martson is a long time resident of New Haven. She lives and works in downtown New Haven and is thoroughly familiar with the pros and cons of urban living. From 1992-1997, she served on the New Haven Board of Alderman as the elected representative for Ward 2, the downtown neighborhood immediately west of Yale University. Fore more : Biography - http://media.mlspropertyfinder.com/418613/preview.jpg