Investing Basics Tutorial

In this video, Liz from Zecco Zirens is going to talk about Investing. Most people work hard and nobody wants to go for money at a bank. You can invest your money but you don't want to pay a broker to work with your money but in the same time you are nervous about investing alone your own money. So, she is going to show how to put some money on stocks. Investing does not have to be complicated. Investing it is a two step process. First you need to decide what kind of investor you are: A growth investor, a balanced investor or maybe an income investor. The second step is to build your portfolio. Growth investor got nothing but time and they look after long term growth of their investments. But this growth can come out with a cost. Balanced investors are a little more conservative than the growth investors but they still want benefit from that long term growth. Income investors have a low tolerance for risk and they are for modest growth of their investments while generating income in the same time.

Now, that you know how do you want to invest, you need to decide what do you want to invest in. There are so many ways to invest your money. You can build a diverse portfolio using Exchange Traded Funds (ETF's). ETF's are asset classes, like domestic stocks, international stocks and bonds. So you can simply purchase one ETF. Here is a typical portfolio for a growth investor. Since you have nothing that time and money and you are willing to take the risk, you can invest 69% of your money in a domestic total market ETF, 13% in an international stock ETF and 8% in a bond ETF. The rest are cash and savings.

For a balanced investor, a typical portfolio was 49% in domestic stocks, 12% in international stock and 18% in bonds, and the rest in cash and savings.

For a conservative income investor, a typical target portfolio breaks down like this: 31% in domestic stocks, 6% in international stocks and 34% in bonds, and 29% in cash and savings. This doesn't mean that this is how you should do. These are just some examples based on your risk level you are willing to take.

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Submitted by YouTube Trader on Thu, 04/08/2010 - 12:11

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