June 27, 2022

Market and Financial News

Market and Financial News Aggregator

How to Start Investing in a Bear Market

2 min read

The party in the financial markets is long over. Chatter about hot stocks and fabulous opportunities in cryptocurrencies and NFTs has died down to a whisper. Recession and bear market are the big buzz words these days.

Clearly, this is not the happiest of times for investors. If you have never put money into the market before, this may not seem the most obvious time to start.

Yet there are advantages to investing in a bear market. With stocks falling in value and day traders giving up, you are less likely to be swept away by fads because almost none of them are profitable. Instead, you can focus on the essential goal of increasing your wealth over the long run.

Most of my columns are aimed at people who already have some involvement with stock and bond investing, often using mutual funds or exchange-traded funds. But this column is a little different. It’s written mainly for people who are still in school, or just starting in the work force, or just getting around to salting away money for the future.

It’s for people like Lucy Neal, who graduated this month from North Central High School in Indianapolis, and said in a note, “I feel like I have no idea what to do to ensure my own financial safety (even though I’ve just completed my AP Macroeconomics class!).”

In a phone conversation, Ms. Neal said it would be helpful to have basic, trustworthy information about how to start investing and stick with it. So here’s a quick rundown. It may be useful even if you are an old hand at this, but it is intended mainly for beginners. If you have other, specific questions, please write in and I’ll try to answer them.

The market decline this year shows how easy it is to lose money, even if you are careful.

Yet investing can be rewarding, if you start early, focus on the long run and follow some simple steps, which I’ll explain.

  • Pay your bills first, and save for emergencies, before putting any money at risk.

  • Buy stocks — and, when it’s right for you, bonds…

Jeff Sommer

2022-06-24 08:18:11

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