It's never too early or too late to think about saving for retirement or just to put some money away in case of emergency. Banks offer savings accounts for this purpose, but the interest you earn is so small these days that it is definitely a good idea to look into some other type of investment strategy. If you want to invest, consider a few of the following possibilities.
If you work for a company that offers retirement investment options, definitely take a look at what's available. A 401 (k) is a great opportunity for investment, and in this plan, part of your monthly salary is tucked away in a savings account earning interest, generally much more than a bank savings account. Plus, your boss typically also matches some of the money you invest. So for every dollar you put in, your company also adds in a dollar. Suddenly that $5,000 you put in your 401 (k) becomes $10,000, which is a great deal for you. If this isn't an option at your place of business, most banks offer Investment Retirement Accounts or IRAs. There are several different kinds of IRAs, and they can provide you with another great way to save for those retirement years.
We have all seen ads all over television and the internet telling us how valuable gold is these days. Gold has always been a valuable commodity and that is especially true during these current economic times. That is because while the currency of various countries and the value of companies can rise and fall significantly, gold is always highly valued, and it sets the standard of value for everything else on earth. So while your dollar value might rise and fall, the value of gold holds steady in every country in the world. To invest in gold, you can buy into an exchange-traded fund (called an ETF) that invests in gold bullion or you can buy shares in a gold mutual fund or precious metals mutual fund. This will include investments in the mining of gold and other precious metals such as silver, as well as investments in actual gold bullion. Another option is to purchase gold coins, such as American Eagles or Krugerrands and store them securely.
You don't have to just invest in gold; however, there are plenty of other ETFs and mutual funds that you might look at. There are differences and similarities between ETFs and mutual funds, including the fact that both are diversified to lower the risk to the investor. This means that the funds include a variety of different investment types or holdings, so that if one company or holding doesn't perform well, it won't adversely affect the overall performance of the fund. Mutual funds are professionally managed, and the value of mutual funds is set each day at the close of trading.
An ETF is somewhat different, and often the fees associated with ETFs are lower than you would pay with a mutual fund. Another way that these two investments differ is in how the value is set. An ETF's value will rise and fall throughout the trading day, and you can buy and sell shares during trading, much like you can a stock. This can be an advantage because the value at the end of trading might be a bit lower than it is at some point during the trading day.
Either way, you have plenty of choices of ETFs and mutual funds, although there are more mutual funds to consider. Generally, your fund will focus on a particular "topic" which might be a geographic area or perhaps a specific type of industry. You might invest in a mining fund or an energy fund or an alternative energy fund. The holdings will be spread among different types of energy companies. With a geographic fund, such as a China fund, the holdings will all be companies and investments in China and Hong Kong. China is not the only area of the world to invest in, and you can broaden your scope to include an Asia Pacific fund or invest in another region altogether, such as Russia, Latin America or even solely American holdings. It is wise to look at a variety of funds and to speak with a financial planner before you make a decision.
If you work for a company that offers retirement investment options, definitely take a look at what's available. A 401 (k) is a great opportunity for investment, and in this plan, part of your monthly salary is tucked away in a savings account earning interest, generally much more than a bank savings account. Plus, your boss typically also matches some of the money you invest. So for every dollar you put in, your company also adds in a dollar. Suddenly that $5,000 you put in your 401 (k) becomes $10,000, which is a great deal for you. If this isn't an option at your place of business, most banks offer Investment Retirement Accounts or IRAs. There are several different kinds of IRAs, and they can provide you with another great way to save for those retirement years.
We have all seen ads all over television and the internet telling us how valuable gold is these days. Gold has always been a valuable commodity and that is especially true during these current economic times. That is because while the currency of various countries and the value of companies can rise and fall significantly, gold is always highly valued, and it sets the standard of value for everything else on earth. So while your dollar value might rise and fall, the value of gold holds steady in every country in the world. To invest in gold, you can buy into an exchange-traded fund (called an ETF) that invests in gold bullion or you can buy shares in a gold mutual fund or precious metals mutual fund. This will include investments in the mining of gold and other precious metals such as silver, as well as investments in actual gold bullion. Another option is to purchase gold coins, such as American Eagles or Krugerrands and store them securely.
You don't have to just invest in gold; however, there are plenty of other ETFs and mutual funds that you might look at. There are differences and similarities between ETFs and mutual funds, including the fact that both are diversified to lower the risk to the investor. This means that the funds include a variety of different investment types or holdings, so that if one company or holding doesn't perform well, it won't adversely affect the overall performance of the fund. Mutual funds are professionally managed, and the value of mutual funds is set each day at the close of trading.
An ETF is somewhat different, and often the fees associated with ETFs are lower than you would pay with a mutual fund. Another way that these two investments differ is in how the value is set. An ETF's value will rise and fall throughout the trading day, and you can buy and sell shares during trading, much like you can a stock. This can be an advantage because the value at the end of trading might be a bit lower than it is at some point during the trading day.
Either way, you have plenty of choices of ETFs and mutual funds, although there are more mutual funds to consider. Generally, your fund will focus on a particular "topic" which might be a geographic area or perhaps a specific type of industry. You might invest in a mining fund or an energy fund or an alternative energy fund. The holdings will be spread among different types of energy companies. With a geographic fund, such as a China fund, the holdings will all be companies and investments in China and Hong Kong. China is not the only area of the world to invest in, and you can broaden your scope to include an Asia Pacific fund or invest in another region altogether, such as Russia, Latin America or even solely American holdings. It is wise to look at a variety of funds and to speak with a financial planner before you make a decision.
About the Author:
Cleveland Jernigan likes writing about investments. For more information about Asia Pacific investments or to learn about various types of investment such as Renminbi investment, check out these fund websites.
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