Lessening the Probability of Stock Market Investing

Today the majority of American people have interest in the stock markets and are investing in them

. It has been estimated that more than half of the Americans households now dabble in the stock market which is quite different picture from what it was few decades back when only institutional investors would trade stocks apart from few wealthy people.

This shift in the perception on investing has been due to the mutual funds gaining popularity apart from the advent of 401k and IRA retirement plans. The mutual funds allow people to make investments in the stock markets with minimum risk while the retirement plans have enabled households in accumulating wealth by parking their money in many financial instruments which have higher rate of returns than the usual saving instruments.

The Securities and Exchange Commission (SEC) has compared the investments risks and returns and has noted that the insured money market accounts, saving accounts, certificate of deposits and saving accounts are insured by the federal government and are fully safe. However, there surely is a tradeoff between the security and the instant availability, they say. You earn fewer returns on your money though your money is safe.

The SEC has also mentioned that in last 50 years stocks has been the only investment vehicle which has provided with the highest rate of return. However, SEC has also stressed on the diversification that is you must go for a mixture of various bonds, stocks, mutual funds, etc. This would ensure that you hard earned investment never gets wiped out if any one of your investment fails to perform.

Now a fundamental question arises: how can a individual investor make investment in the stock market for profits? The answer lies in the techniques used by the big institutional investors which have almost been unknown or have been unutilized by the private investors.

These two investment techniques can be explained as minimum risk involving strategies which you can use with any broker in any market and a no risk strategy which is limited to few brokers and stocks. By using these techniques few of your profits would be significant while others could be modest. These techniques are capable of generating about 45-50 percent annual return for you and are centered on the minimum risk investing in the stock markets.

The bottom line here is that maximum number of people would like to have highest possible returns with the minimum or no risk to their investments. By making efficient use of the investment techniques used by the big institutional investors' people can infact achieve their investment goals.

Lessening the Probability of Stock Market Investing

By: Michael Miller

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