To Get Started Investing Thesis

Pages: 5 (1361 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Level: College Senior  ·  Topic: Economics

To get started investing a number of events must take place. The

desire to invest is one that can be fulfilled quite easily if one knows a

number of basic items. Those items include questions such as, why do I

wish to invest? A primary purpose for investing from the perspective of

most individuals is so they can make money, and though most would love to

make a 'quick killing', the majority of investors seek to invest in order

to have the financial well being that comes with long-term investments.

This is a concept that most investors know and understand well, although it

is at times extremely difficult to remember when watching stocks go through

the ups and downs of a daily market, and it is especially hard when

watching your portfolio fall by the amounts and percentages that most

investors felt in 2008 and continue to witness during 2009.

One recent article informed readers that "some 300 articles were

published last month telling investors 'don't panic' or 'not to panic"

(Birger, 2008, pg. 47). The article then went on to show that now just

might be the perfect time to panic and that "at the very least, it's a good

reminder to take a hard look at your financial plans and to reevaluate how

much market risk you can truly withstand" (Birger, pg. 48).

When deciding whether to invest in stocks, bonds, mutual funds, real

estate or other long-term investment vehicles, knowledge is the key to

success, although even the most knowledgeable can get slammed in the

marketplace as evidenced by Phillip Goldstein.

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Goldstein is a hedge fund manager and an investor in Nuveen funds.

During a recent interview he said "the common shareholders are getting

killed...Nobody in their right mind ever thought they would take a hit"

(Strahler, 2008, pg. 1). Some of Nuveen's funds have plunged by over 70%

in the last twelve months. That translates into a $100 bill now being

worth $30, which is not a good thing if you are attempting to build a nest

egg for yourself.

Owners of stock shares are partial owners of the companies in which

Thesis on To Get Started Investing a Number of Assignment

they own stock. The shares give the owner certain basic rights and can be

traded on an exchange such as the New York Stock Exchange (NYSE) or the

National Association of Securities Dealers exchange (NASDAQ). Some of

the obtained rights an investor is granted upon the purchase of shares of

stock include the owner's right to vote and the right to any dividend the

company may declare. There are different classes of stock, preferred stock

and common stock being the two most available to a normal investor.

If the investor desires to invest a small amount of money on a monthly

basis, or does not wish to be bothered with picking individual stocks, then

a mutual fund might work best. A mutual fund invests the accumulated

monies from individuals in certain types of investments. Funds that invest

in bonds, stocks, growth stocks, dividend-producing stocks, top ten stocks,

emerging market stocks and a myriad of others are available to the

individual.

An advantage that can be gained by investing in mutual funds is that it

has a professional manager that buys and sells on a daily basis the

investments contained within the fund.

Investors should be knowledgeable concerning what it is that mutual

fund managers are investing in. As stated above, many funds are currently

losing value because of what they are invested in. However, even during

bad times good investments can be found. Profitability for many

corporations took a hit due to the high oil prices of 2008. One recent

article states, "high energy prices have started to put a dent in corporate

profits. But surprisingly, one industry that relies heavily on oil has not

been hurt: the railroads" (La Monica, 2008, pg. 35). Investors who had the

foresight to invest in railroads would have seen their shares go up in

value while the vast majority of investors were witnessing the exact

opposite.

Another example of smart investing would be to invest in shares… [END OF PREVIEW] . . . READ MORE

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https://www.essaytown.com/subjects/paper/get-started-investing-number/45971.