The Current State of the Market - Why You Should Invest Now!

- 8:41 AM
The Current State of the Market - Why You Should Invest Now!

Investing has become a sensitive subject for people lately since the recent market crash. Investors have lost significant portions of their portfolios, and those that had no investments feel like they dodged a bullet. "Investing" has almost become a four letter word.

The Current State of the Market - Why You Should Invest Now!

I'm here to tell you something, many people who lost money in the market in the last year have or will pull out what is left and put it into a money market or CD account. Guess what's going to happen? They are going to miss the recovery! It's like the people who bought a house in Los Angeles in 2006 for $600,000 (even though they couldn't afford it) because they knew houses would continue to appreciate at record-breaking double-digit levels. We all know what happened - the house is now worth less than $400,000, will soon be owned by the bank if it isn't already. But think about the people who are buying houses right now... They can now buy that same "$600,000" house for a mere $375,000. What a bargain! The same thing is happening in the stock market.

The biggest challenge for people now is that the stock market is a bigger mystery than the real estate market. Real estate is the American dream, and the process is much more simple - you get a loan, buy a house, make (hopefully) fixed payments on it until you pay off the loan or trade up. It's really not that complicated.

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Investing in the market can seem much more complicated. There are stocks, options, commodities, foreign exchange... Blue chips versus small cap versus mutual funds. Many people reading these words will not really understand what they all mean or what their impact can be on their financial future. What does diversification really mean, and how do you do it? Do you trust someone who is paid when you make a trade, or when you make a profit? How do you find the right person?

The first step is to educate yourself. If you blindly trust someone else (even if you have known them all of your life and trust them with your children), you are still following blindly. Understand the market and what you are getting. You will find that with a little bit of education, more options will open to you, it won't seem so scary, and you will likely get significantly better results.

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