We all need to save money or at least we all should be saving money. 10% of your salary is the recommended norm, so the experts say. And most of us do. Maybe you are a believer in a trusty bank savings account, a 32-day call account or even that trusty but rusty tin under the bed.
But there comes a time to put down our safe little bank box and march straight into the unknown and scary world of stock broking. Stock broking is the business!
While you know that your money is safe in your local bank account, earning in the region of 1.85%, you are tempted at popping some funds into a more risky vehicle. Eventually you will discover that isn't working for you anymore.
But the choices are vast and varied and downright scary! From investing in different fund managers to different shares and even more confusing, different segments of companies, can make anyone just duck under the pillow and stick with their cash.
A novice investor will, at first, invest in equities that are local, as this seems like the safest route to take in this risky new world. But experts state that broadening your investment into the US market is a good bet.
Choosing an experience fund manager can ease the tension of trying to pick stocks and shares on your own. However, it would be best to research the fund manager's history in picking stocks and companies, than working out which funds are doing the best.
A good fund manager will have their toe in one lake of possibility and their finger in another sea of opportunities. Diversifying their risk pool is what a good fund manager makes his business out of. He has his eye out for frequent trends and knows when to sell and when to buy.
Further, if you know the emerging company market well, you would know who to follow and when to pull out. Let a fund manager do all the working for you whilst you still keep your eye on the ball.
There is much to be said for the technological paths as well as healthcare, alternative energy markets and the transportation industry. So when diversifying, consider these industries too. You must search for exactly these sorts of companies that are superb but don't necessarily go for them where their valuations reflect their future prospects.
Bottom line is that when you do decide to take that leap of faith into the world of stocks, funds and managers, it needs not be a daunting episode.
Keep it simple learn gradually but you need to master the fundamental aspects such as diversification, investing in superb emerging companies, work as a solid stock picker and follow the trends.
With all that in mind, you should be able to breathe easier and rest assured that your well-earned money will be in safe hands.
After all, sticking your cash into a bank savings account is so last year!