Current economic conditions have left many questioning the wisdom of investing in the stock market.
You may have seen your investment portfolio or 401(k) dwindle, and you may be thinking that there have to be better places to invest your money.
There is no simple answer, and you have to evaluate your personal situation carefully, but for most people, investing in the stock market remains the best decision.
One thing you need to remember about investing in stocks is that you have neither made nor lost money until you actually sell your stock.
If you own stocks, everything is just a number on a piece of paper until then.
You should be less focused on what that number is today and more focused on what that number will be when you are ready to sell.
Investing in the stock market is a long term investment.
Over a period of several years, stock prices are going to fluctuate.
One quarter, or even one year, of results is not enough to know how a stock is going to perform over a decade.
Whenever possible, examine a company's earnings records for as far back as they are available before investing in its stock.
You may notice that even the so-called blue chip stocks have had severe drops in share prices at times.
Over time, investing in the stock market has proven to have an excellent return on investment ratio.
It has had periods of poor performance before, and likely will again.
Those who are forced to sell when it is at its worst are going to be the ones that suffer the most.
Those who can afford to hold onto their investments until the market rebounds will see less ill effect.
Therefore, your timing is critical when you evaluate investing in the stock market.
In other words, if you are in your twenties, you can afford to wait, investing and then allowing the market to perform over the next several decades.
On the other hand, if retirement is imminent, you need to evaluate your investing options by a different set of criteria.
Investing in the stock market is a confusing proposition, even if you understand all of the terminology and how investing works.
If you are a new investor, you will need to do some research.
Educate yourself on the basics of investing, including the terms commonly used when discussing stocks and the market.
You may need professional assistance, ranging from one or two brief meetings with an advisor to learn the basics to having a broker handle all of your investing.
Your history, the time you have to spend on your investments, and whether or not you find close involvement with investing to be too stressful are all elements to consider when deciding how much help you want.
Whether it is a bull market or a bear market, investing in stocks is an exciting proposition.
There are no sure things, no guaranteed money makers when it comes to investing.
Investing is always a gamble, and always carries a certain amount of risk.
You want to minimize your risks, but you should also accept that you can never eliminate them altogether.
People have different investing goals, and therefore different risk levels they will tolerate.
You need to discover what your tolerance for risk is, and then stay within it when investing.
This will save you many sleepless nights spent worrying over your investments.
And as far as whether you should still be investing in the stock market, it really depends on your personal needs.
For most people, the answer is a resounding "Yes" but in the end, only you can make the final call on investing in stocks or not.