Investing: Riding the Stocks

When the Dutch first inhabited Manhattan island in the 1600s, they erected a wall around their encampment. Along the southern stretch of the wall, between the Hudson and East Rivers, Dutchmen traded with the Native Americans. There is no longer a wall, but plenty of trading still takes place on Wall Street.

Today, Wall Street is the catchall name for the New York Stock Exchange, a place known for its hustling, high-pressure persona. This may explain why some people become intimidated when it comes to investing in stocks. Although, with the right knowledge, investing money in stocks isn’t high pressure and may possibly be rewarding.

Know What It All Means

Most people are familiar with popular stock market phrases, but can’t necessarily make sense of the terminology. There are multiple “spaces” where stocks are traded such as The New York Stock Exchange, the American Stock Exchange, and the Nasdaq Stock Market. Then, to track growth, decline, and everything in-between there are indexes: The Dow Jones Industrial Average, the Nasdaq Composite Index, the Russell 2000 which tracks small company stocks, and more.

Stocks are essentially parts of an entire company. A stock’s value is determined in the market based upon the perceived value. The markets are simply auctions. When an individual buys stocks, those stocks will either increase in value or decrease based on perception of value which can be influenced by a number of data points including profits, revenue, earnings outlook, socio-economic changes, political risks, currency fluctuations, interest rate changes etc. The previously mentioned indexes reveal the movement of a broad basket of companies with some similar traits. For a novice stock investor, these numbers can either offer a rational glimpse into the stock markets, or drive him/her towards an emotional meltdown.

Enlist the Help of a Professional

Why do you need a professional to help invest your money? Because no matter how much you know, your emotions can get the best of you. Ideally, professionals not only guide initial investments, but may also discourage clients from making rash financial decisions.

When seeking professional help with your investments, look for advisors that act as your fiduciary.  That means they are trusted to keep your best interests in mind.  A common misunderstanding is that an insurance agent is your “agent” he/she is not.  The insurance agent is an agent representing the insurance company not you!

Financial advisors operate under fiduciary duty, or a level of trust between client and advisor. This means financial advisors put a client’s needs first. They often bring with them a tool belt full of different financial products, not just stocks, bonds and mutual funds. The advisor’s/fiduciaries role is to help the client understand the financial products so that they might choose the right tool for them.

Now that help is available…

Whether you have a dollar or a million dollars in your company 401(k) retirement account you now explore the value of a real advisor simply by visiting the Self Directed Brokerage Account advisor contact site. From this site you can begin to take advantage of the features of your retirement plan.  If you wish you can also download a fact finder sheet that can be used to create your personal retirement financial plan.

To learn more about Rick Willoughby, view his Paladin Registry research report

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