| There are two choices you have while investing in | | | | set goals before you start investing. Why before you |
| the stock market - active investing and passive | | | | ask? Stock investing can be a very emotional |
| investing. In the active style, you pick your own | | | | process. That is because everyone is very emotional |
| investments and make all the decisions about your | | | | about losing or gaining money. If have a few |
| money. In the passive style, you simply let your | | | | guidelines in mind regarding how much you want to |
| investments mirror a stock index or a collection of | | | | make or how much you are willing to lose in a |
| stocks selected by a third party. | | | | particular investment, you increase the odds of |
| When you hear the term investing - most people are | | | | making better investing decisions during the whole |
| referring to the former. A lot of people believe that | | | | process. |
| you have to constantly monitor the market and keep | | | | Some questions that you should answer before you |
| on top of all the news about stocks you own. Whats | | | | start investing are: |
| ironic about all this 'active' management is that even | | | | - How much money do you need to sustain your |
| after all this monitoring the odds are against you to | | | | current lifestyle in retirement? |
| beat the benchmark such as the S&P 500 Index. | | | | - How far are you away from retirement? |
| If you think this is a lot of work for very little return | | | | - What type of investments are you comfortable |
| you can choose the more 'passive' style. In this form | | | | with? |
| of investing, you pick an index and buy an ETF that | | | | - How much money will you keep aside for |
| mirrors the returns of the index. All other things being | | | | short-term financial needs? |
| equal, your returns will mirror that of the indexes | | | | - What kind of returns on your investment (profit) |
| with very little management or research on your part. | | | | would you be content with? |
| At this point, you have probably figured out which | | | | After answering the above questions, you have an |
| style suits your personality best. Before we jump into | | | | idea of what your investing style is, how much |
| the exact steps involved in buying stocks, you have | | | | money you'll need and the big picture in general. Now, |
| one more step to complete. You have to plan and | | | | you're ready to start investing your money in stocks. |