Investment Tips to Get Back in the Game

Posted on: April 27th, 2010 by

Investment Planning - Financial Planning - Rockville, MDHaving shaken off the jitters of recent stock market downturns, many investors are beginning to re-emerge and re-enter the stock market, or at least become more active with current investments.  Many of these people are simply looking to recoup their retirement losses.  Entering into the stock market without the proper information or assistance of an investment manager can be a recipe for disaster though.

If you choose to venture into the investment marketplace on your own, however, there are a few things to keep in mind.  First, you should consider favoring large company stocks over those of smaller firms.  If anything were to happen in the future, heaven forbid, larger companies can recover a lot faster than smaller companies.  You must also remember that bear markets do happen, and even though we have just gone through 2 terrible ones in the past decade making it seem easiest to just jump ship and bail, you need to hold out in order to beat inflation and reel in returns.

Another thing to keep in mind is to steer clear of long-term bonds.  If inflation escalates, which, lets be honest, is very possible because of the Federal deficit, you won’t want to be stuck in an investment where the market will demand higher yields than your bond is paying.  If you’re in a higher tax bracket, a good choice would be municipal bonds, which are generally tax free.  Those in lower tax brackets may want to invest in taxable bonds, which generally have a higher yield.  A financial adviser can help choose the best bonds for you.



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