What is the safer way to investing in the share market.?

Answer 1

Bonds are the next safer thing. If a company is liquidated, they pay off the bond holders long before the stockholders get their money. A company may pay dividends, but they are usually (not always) drawn from profits--a company like GM often doesn't make profits, such as recently, so dividends may be cut or stopped. If your investment was to give you a stream of income, then bonds and, one more, preferred stocks are designed to do that. Preferred stocks are sort of a middle ground between ownership shares and bonds. They pay a predetermined dividend, profit or no, and if the company folds, the bond holders get paid before stockholders, and preferred stockholders (not all companies issue preferred stock) get paid before holders of common shares. There is a problem, though, bond holders and holders of preferred shares usually don't get to vote on governance or public matters brought to a vote. Common stockholders can bring about difficulties that bondholders and holders of preferred stocks can't fix by anything but selling their shares if things go awry in they company.

Then too, if that is too iffy for you, then invest in annuities by top rated insurance companies or certificates of deposit in federally-insured banks. Government bonds, particularly Federal for state and municipal bonds can and do go into default, are the "gold" standard of financial investing. Failing that, try gold and silver. If that is still not good enough, try a glass jar buried in the backyard, money stuffed in a mattress might get lost if your house burned down.

Answer 2

if you are just starting out I would consider a large cap ETF that pays a dividend as well...something like the iShares Dow Jones Select Dividend Index (DVY). It invests in the largest 100 dividend yield companies..you'll get a nice mix of financials, energy, utilities,healthcare, etc. There is very little risk and you'll be able to find some companies within the fund that you might find suitable to invest in from there on.

If you are looking for something riskier with higher immediate potential growth. Consider a foreign ETF like iShares MSCI Brazil Index NYSE:EWZ. Latin America is still very hot, I would imagine there will be another great year ahead. As long as the U.S. dollar is lackluster, foreign stocks and funds make quite a bit of sense. This stock is selling at around 45/share, so it is still undervalued in my opinion...i think this stock hits 75-80 by the end of the year...and then I might consider moving the money into something else.

Answer 3

Strictly speaking there is no safer way in investing in stock markets. But you can reduce your risks and improve overall returns, by going through mutual fund route or portfolio management services. Mutual Funds' portfolios are well diversified. You may prefer a diversified equity fund instead of sector funds; you may also go in for balanced funds.

All the very best.

Answer 4

If I had my time over again, I would have put my money in an index-tracking Mutual Fund. In the UK, this would be a Unit Trust, Investment Trust or OEIC inside a tax-free ISA wrapper (up to £7000 can be invested per year).

A lot of people buy and sell shares in individual companies and it takes decades of reading books on stock-picking methods, analysing company reports, deciding what to buy and sell and when, and losing money on most of them before you realise that shares in single companies are virtually unpredictable, you're no smarter than anyone else and investing in an index-tracker would have got you 7%-11% compund growth for all that time.

I would invest in a tracker which tracks a wide index in your own country, so your money is spread across hundreds of companies to minimise risk and volatility (not the same thing) and currency risk (changes in exchange rates over the decades).

In the UK, a FTSE All-Share Index tracker would spread your investment across all the companies (several thousand) in the FTSE All-Share Index. In the USA, you might use the Dow Jones Wilshire 5000.

Historically, the US and UK markets have made something like 10% a year, but have short term wild swings. At that rate, you double your money every 7 years (multiplying your money by 1.10 per year, to the power of 7 years).

Look for a fund and ISA with low entry charges and low annual charges.

Legally, salesmen can only quote a conservative figure of 7% a year growth, but you may do better than this.

Do your own net search for annual growth rates in your chosen stockmarket index over 30 years.

If you have a lump sum to invest, to avoid investing at just the wrong time, when the index is higher than normal, you might want to dribble your money in as small monthly payments over say 3 or 4 years until you are fully invested. Similarly, decades later, you can sell shares and withdraw money slowly.

If you do sucumb to the madness of investing in single company shares, ignore charting as share-price graphs don't predict the future, remember that a good company is not necessarily a good investment (it may be very over-priced), only invest in companies that are simple, understandable companies, not dependent on a short-lived fashion, have strong barriers protecting them from rivals (high-start up costs for rival companies, patents, trademarks, internationally known brands that will last for 100 years, monopolies, have products that cannot be pirated or faked, etc).

Answer 5

After getting through knowledge of share market

Answer 6

Have you considered trading in FOREX (international currency exchange) instead of stocks?

With Stock trading with $500 to start with, you can trade on one stock out of 10,000 possible choices and if it goes up by pennies you make a little money but you pay trade commissions.

In forex, the same $500.00 lets you trade $50,000 worth of currency and only 5 major currency pairs to choose from and no trading commissions.

I am making about 20% per month trading forex. There is even software available that does it all for you

For more information go to www.huttoinvestmentgroup.com and check it out.

Answer 7

safer than what? guranteed to lose purchasing power after inflation & taxes in a bank so that is not safe. Diversification is the 1 hope for safe, solid growth but have to let go of the security blanket.

Answer 8

Invest in funds or units which have a diversified market portfolio!

Answer 9

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Answer 10

Mutual Funds.