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Home Investing larger sums of money
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Written by Administrator   
Friday, 27 March 2009 02:11

Investing sums of money

If you are already financially successful or have a moderate to large sum of money you want to invest, you have many options available to you that other investors do not have - either because they don't have the means to make large capital investments, or they cannot afford to take the risk. Depending on how much you have to invest, any or all of the following may be an option:

  • Stocks and mutual funds
  • Bonds
  • Real estate
  • Hedge funds
  • Gold
  • Other investments - art, jewelry and more

What are the risks?

One thing to look at in any investment is how much risk is involved and how much risk you are willing to take. Maybe you can take a lot of risk, but you don't want to. There's nothing wrong with that, especially if you've worked hard to build your money and don't want to lose it. On the other hand, you may be willing to risk some of that money for the potential of bigger payoffs down the road.

In general individual stocks are considered the risker of investments, with risk decreasing if you invest in mutual or index funds. Bonds are considered the lowest risk, but the potential profits are not as great either. Real estate might be somewhere in between, although the recent real estate boom and bust was an extreme example of a boom/bust cycle in real estate. Typically real estate is not that volatile. In fact if you are thinking of investing in real estate, this might be a very good time. One way to mitigate risk is to have a mix of investments - some higher risk, and some lower risk, with your cash strategically allocated among the different risk groups.

My personal investment style is a mix of different things, although I tend to stick with stocks, either individual or in funds. And more recently i've also become interested in real estate, where during the boom I was very negative on it. Mainly though I do all of my own research and I find my own investments, because it's just something I enjoy.

Getting started

Ok so you've made it this far - now what? Once you've got a general idea of the amount of risk you are willing to take on, the next thing to decide is how involved you want to be in your own investments. Some people are very interested in researching, finding and managing their own investments, while other people either don't have the time or interest. And some people might be a little in between - they have a good idea of where and how they want to invest their money, but they don't have the time or resources to research and manage investments on their own.

If you think you want to try doing your own investing, on the Investing Basics page you'll find information on investments you can do on your own and how to get started.

Is a money manager right for you?

If you're not sure whether you want to do your own investing or have someone else do it for you, this is a legitimate concern. Investing on your own takes time and involves homework, so if you are an extremely busy person or have your own business to run, you may not be able to find the time needed to research and manage your investments on your own. And lets face it - it's something you should probably be somewhat interested in. If you find things like numbers and financial charts and graphs to be boring beyond all comprehension, you're probably not going to be very motivated to stay active in your investments. And that's nothing to be ashamed of - lots of people just don't have the patience or the will to stare at numbers for hours at a time!

So what if you are one of those people who doesn't have the time, or just plain hates numbers? If so, it may be in your best interest to speak with an investment advisor and possibly consider a money manager. Even if you don't want someone else to manage your money, sitting down with someone who can take the time to analyze your total financial picture and then help you come up with an investment plan tailored to you own specific situation may be well worth the time spent. A good investment advisor will take a complete inventory of your assets and liabilities, and consider the following factors:

  • Your age
  • Your income and tax bracket
  • How you feel about risk
  • Past investing experience and interest
  • Your intermediate and long term financial goals

Based on this information and data, they will be able to design an investment plan that will help you achieve the best possible return on your investments, while keeping you in a level of risk you are comfortable with.

Return to Getting Started from Investing Sums of Money

Last Updated on Saturday, 28 March 2009 01:58