Pat Farrell wrote:The US stock market just set a new high (Dow average). It has recovered all of the lost value from the 2008 crash. This is good.
Or, it can mean that if you put money into the stock market in July 2008, right now, you are just back to where you started. So you haven't increased it at all. Most people would say that such an investment was a really bad deal, five years later and you have no increase in value.
If I had $10K, and were just starting, I'd put it in a EFT that tracks the S&P 500. But I'd only do it if I was looking to invest for at least five years, and it is much better if you invest for longer, say 10 years.
Today, there are no risk-free investments. In the US, the interest rate is so low that if you buy a bank CD, you will probably get 0.25 percent per year. This is lower than inflation, and not close to covering taxes.
fred rosenberger wrote:the word "investment" usually implies long-term. I invest in the stock market. I put money in, and I'm not even LOOKING at taking anything out for 20 or more years.
"speculating" is what you are talking about - short term. this has much higher risk. you are more likely to loose your money, but you have a greater chance of making a lot of money quick (although the odds of the first still greatly outweigh the second).
Think about it this way. If you want to make a lot of money fast, go to a casino and put it all on a single number on the roulette table. If you win, you're return is 35 to 1. your 10k will become 360k, and it will only take about 30 seconds.
However, you are going to loose 36 or 37 times more often than you'll win (depending on whether it is a European wheel or an American wheel).
Or you could bet it on red/black. you can double your money quickly, but will loose it all slightly more than half the time.
It boils down to the fact that the greater the potential reward, the greater the potential risk.
Jesper de Jong wrote:No, it's because you're posting this in the Meaningless Drivel forum. Don't expect to get serious answers
Martin Vajsar wrote:
Yahya Elyasse wrote:ok what was the sarcasm about?
The answer, of course, is forty-two.
(Unless I'm seriously mistaken, Ulf is referring to the Hitchhiker's Guide to the Galaxy, which elaborates extensively on the usefulness of towels in more or less any situation. And on the importance of the number 42.)