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Basic Of Investment

During these tough times of economic struggle, people are advised to do their homework and strategize to decide on the best investment ideas. Without enough knowledge, experience, and understanding, in the fields of finance and money management, even the best investment ideas can turn into gambles. By gaining more information and experience, you will be able to spot a good investment vs a good-looking investment that turns out to be a lemon.

Investing can be intimidating to the novice because of the perceived risk. But the more you understand and the more you can predict your results, the more certainty, and the less risk. A smart investor has several things to consider when choosing an investment vehicle. One has to first consider their personal financial status and objectives. The following are other factors the savvy investor needs to take into consideration.

1. How much is available to invest without causing financial distress? 
2. Do you want a long-term or short-term return on your money? 
3. Should you invest in stocks, commodities and/or real estate? 
4. What is the outlook of your choice? 
5. Domestic or Global?

Real estate is one of the best investment ideas if not the best one can pursue. It accomplishes a couple of things. It provides the basic need for shelter and it also appreciates in value over time based on location and maintenance. Real estate is the biggest investment most people make in a lifetime. Location is the prime consideration among other factors that determines the rate of return. Real Estate also carries less risk than many other investments because the market fluctuates less than the stock market. When treasury bills and the stock market are up real estate is down and vise versa. Aside from the primary residential investment, rental property is also a good bet. Despite what the picture looks like today, there are many successful real estate investors who have made a very comfortable living in this arena.

Stocks and commodities can become a bit more complex because there are so many to choose from and the stability of them fluctuate more frequently. Some fluctuate from day-to-day. Stock is a form of fund-raising for businesses and they offer return indexes for the investor. Commodities are products of similar quality sold by several or many companies. An example of a stock investment would be purchasing a few shares of Google whereas a commodity example would be oil.

There are many familiar stock brokerage and real estate firms for the novice to consult with. Education is the key and expert advice is recommended before diving into this ocean of dreams. For the new stock investor a mutual fund may be advised, because it pools investments with other investors and most times spread your investment between several businesses. This creates a level of security against huge losses. In today's market a list of good short and long-term investments follow:

1. Energy (oil, solar, wind, electricity & water) 
2. Gold & Silver (copper and other metals follow) 
3. Major successful corporations and promising small to medium-sized businesses 
4. Real estate

Regardless of which area you choose one thing to keep in mind is not to limit oneself to domestic investments especially where the dollar is concerned. With its decrease in value, global investments may be something to consider. It is always good to invest at home, but in a struggling economy, one has to look at the big picture to get the most out of the best investment ideas.

Many investors who make these deadly mistakes, fail to understand the best ways to manage risk become a victim to the daily movements of the market. Meanwhile, those who understand how to use volatility in the favor, instead benefit from those who fail to understand and manage the fluctuations.