Home Business & Finance The handy investing answer book
Why are people afraid to invest?
Most people fear investing because they lack knowledge about investing, don't know how to manage the risks, and hear and read about various crashes in the markets that happen periodically, which can cause people to lose a lot of money.
What are some of the biggest mistakes individual investors make?
People investing in the markets typically sell when the price is low, during or at the end of a notable decline, out of panic. And they may buy at the highest price, once they discover a new investment they hear of from their friends, who heard it from their friends, and so on. Or they buy when the markets are reported by various media outlets to be at their all-time high. By the time the news reaches you, it is probably long past the time to have invested.
What are some other mistakes that investors make?
Investors often make emotional decisions about owning investments, perhaps by refusing to sell the stock of a company because a relative worked there, or being afraid to sell a stock because of losing a certain amount. If the investor had sold it, he may lose less than if he had kept it, but because of emotions, the investor holds on to it, hoping the price will go back up.
What types of investment or financial products exist?
There are many different financial products, mostly divided into one of these broad categories: stocks, bonds, and cash. In addition, there may also be real estate, insurance policies, private equity ownership, currency trading, and hybrid investment products that combine the benefits of a mixture of these and other investments.
What are some of the most important investment types?
Some of the most important investment types include: emerging market stocks; foreign stocks; U.S. stocks; precious metals; commodities; high yield corporate bonds; municipal bonds; cash; treasury bills; money market funds; U.S. high quality bonds; European bonds; global bonds; and long-term U.S. government bonds.
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