• torskie 1:08 pm on March 10, 2010

    You could make money and you could lose money

  • Dick Richards 1:08 pm on March 10, 2010

    Here is example of what I have experienced in last 10 years in stock market.

    1997 had around 150K and put it all in the market
    by Mar of 2000 I had 540K :)
    by Oct 2003, I had 190K :(
    Today, I am back around 500K and plus put around 100K into a home for down payment. :)

  • Greg R 1:08 pm on March 10, 2010

    The advantage of investing in the stock market is as follows. If you earned a average return of 10% on a $100,000 account in 10 years you would have $259,374 and in 20 years $672,749.
    While if you kept that same money in a CD averaging 4%. You would have $148,024 in 10 years and $219,112 in 20 years.
    The con of investing in the stock market is that there are no guarantees and that your account will not grow 10% every year. You will see volatility. I.E From March 2000 to September 2002 the S & P 500 went down 48%. If you are in the stock market you need to be in it for the long term and not make changes. There have been studies done where if you missed the best 3 days in the market that 10% return goes to 6%. The market is very efficient.

  • Johnny B 1:08 pm on March 10, 2010

    Stocks and equities are your best hedge against inflation because their value is based on economic conditions much like inflation. Historically, the stock market has averaged from 10%-12% returns. Of course it has its ups and downs, but if you can let your money stay put and invest for the intermediate to long-term, you can expect these kinds of returns over time. Also, if you invest consistently (i.e. monthly) you’ll get the advantages of dollar cost averaging because as the market fluctuates, at times you’ll be buying low (and buying high), but over time the average will ultimately increase your overall returns. You can also look to rebalance your portfolio annually or so, which means you take a look at your positions and sell off what’s been outperforming the rest of your portfolio and buying those that haven’t done as well. By doing this you are really selling high and buying low. Over time this will increase your returns as well. You may earn higher or lower, depending on your risk tolerence, how you invest, which investment vehicles you choose, and I can turn blue in the face if I kept going. I wouldn’t jump into the equity market for short-term investments because the risk is too great. Only do this if you have vast amounts of time, knowledge, and the tools to constantly monitor your positions. Most people don’t and even me as an advisor I wouldn’t do this for myself. That’ll be a hobby I’ll take up with some spare cash when I retire. Hopefully that gave you a little insight, but I can go on and on about this topic and I’m pooped from a long day at the office…

  • UtopianIdeals 1:08 pm on March 10, 2010

    Look at the portfolio below:

    20% Large Cap Growth
    20% Large Cap Value
    20% Midcap Blend
    20% Small Cap Blend
    20% International Blend

    This portfolio, over the last 80 or so rolling 10 year periods has resulted in a loss only one time. With proper fund selection it is zero times. During that period it has averaged over 10% return per year. There have also been a dozen or more times in that period, where the stock market has fallen more than 20% at a clip. The biggest drawback of the stock market is that you will be tempted to sell after one of those 20% down periods and you will miss out on significant future appreciation. I would find an advisor that believes in that portfolio above, and intends to have you own it for the rest of your life. The 1% or so you end of paying them, will be well worth it in the end. Most people cannot handle the volatilty alone.

    • People are reading:

    pros and cons on investing alone