Are You An Investor or Trader?

Securities investment falls under the broader umbrella of bond and stock market investing. Apportionment of investments depends on the level of risk you are comfortable with. Investment in bonds has less risk of loss than stocks, but also less potential for gain, particularly during periods of inflation. On the flip side of the coin, stock market investing has more potential for high yields, but with no guarantee against loss, since stock prices are more volatile.

You should invest partly in bonds and the balance in stocks. If you are older, invest less amount of money in stocks and more in bonds. However,if you are young,you should invest more in shares of companies. Choose those companies for stock market investing that have growth potential and proven track potential.

Shares come in different sizes and categories. There are large, mid and small caps and there are penny stocks. As a beginner, you can invest in large and mid cap companies and only after you gain experience, you can consider investing a small portion in small caps and hot penny stocks. These are the riskiest but if handled adroitly, give the largest returns. However, it needs expertise and nerves of steel.

Stock market investing is not something you jump right in; you have to start spending time to learn the basics of stock market investing and its various aspects. As you gain knowledge, start investing small amounts of your money over a period of time rather than investing all the money at one go.

If you're looking for a simpler investment strategy than stock trading, consider investing in bonds. Top-rated government and corporate bonds are easily available from your local banker or broker. Keep in mind, though, that bond investing yields gain over a longer time span. The nature of the stock market makes share investing appropriate for not only short-term investors, but also those who have an extended time frame.

Do not consider the tips from others on which share to buy especially in the case of riskiest investments such as hot penny stocks. You can consider these risky investment options only after thorough research on the company concerned and all other related factors has been done. Have a good time investing!