TUESDAYS WITH MIRIAM :: Is it Safe to Invest My Money Now?

With the current recession and the falling stock prices it is frequently asked whether or not it is a good idea to invest money. Yes, it could be a good time because prices are low; however, it could also be a bad time because it is unknown when the prices will rise and whether or not the company you invest in will be able to make it through the recession. If you want to invest, here are a few pieces of advice:

1. If you must invest, invest in things that are receiving funding and that the government is focusing on. For example, the major focus right now is the automobile industry. Even though their prices are down, it is evident that the government is attempting to keep them afloat and it is very likely that their prices will begin to go up.
2. Determine what your tolerance for risk is. If you cannot stand to lose money then your tolerance for risk is low. If you can stand to lose money and it won’t cause you any hardship then your tolerance for risk is high. If your tolerance is high then you can take the chance of investing in the stock market because your returns will ultimately be higher, but if your tolerance is low you should invest in CD’s or money market accounts because your money is protected by FDIC and you won’t lose any of your initial investment.
3. Find a financial advisor. You can get free advice from the advisor from your local bank. They are more aware of what is going on in the market and where you are more likely to make money instead of losing it.
4. Diversify!!! Don’t put all of your eggs in one basket. If you spread your investments around you are more likely to diminish the likelihood of large losses.
5. Look at investing in municipal bonds. These are bonds that help to fund city projects. As long as your city is in good financial shape, it is not likely that you will lose money.