Investing: For Dreams, Goals and Retirement

Mortgages, bills, college education, personal expenses, taxes and retirement are an inevitable part of life. How we manage and hopefully diminish these financial obstacles is crucial in our attempts of achieving the quintessential goal of financial freedom. Combine these financial stressors with the unpredictable path of our delicate economic infrastructure that features elevated unemployment, inflation and interest rates and frivolous government spending and you have a recipe for financial insecurity and instability at best. Enter the concept of investing that may be able to alter your realizable fate down the sinuous path into financial obscurity.

Investing is not a new and mysterious term that has recently surfaced and circumnavigated the globe, nor is it a foolproof way of attaining the holy grail. What it is, however, is a tool which can allow you to realize your dreams, goals and retirement objectives. Think of investing as your financial plan, a blueprint of sorts that can steer you down the right course towards financial bliss. Stocks, bonds, mutual funds, ETF's, IRA's and IPO's are dedicated ways of exploring investment options in the stock market towards achieving financial success. There are many scenarios that can play out in your endeavors towards seeking financial freedom. Pros and cons are affiliated with each possible strategic investment options. Careful planning, observing and tracking of these, on both a macro and micro level, can potentially improve your results.

So, what are your financial goals? Once you determine these, your next objective is to come up with a plan of action that enables you to efficiently reach these goals. Planning to make alot of market in the stock market is not a reasonable goal, however, buying a house on the water, getting out of debt, retiring at an early age or putting your kids through college are. How are you going to do this? Some of you may have the luxury of dumping a huge sum of money in the stock market which is great. However, if your like me and don't have the financial resources at your disposal, allowing you to drop thousands of dollars in the stock market, you have to get creative. You have to learn to pay yourself first! What this entails is you set aside money each day, week or month before you pay bill, credit cards and expenses or buy that tenth pocket book in the past month. No goal is to large nor is any amount of money to negligible in allowing you to achieve these financial goals. I love this expression... a leaky faucet will eventually fill a sink in time, drip by drip. Don't get discouraged in thinking your goals are unattainable or irrational.

Get in the habit of putting aside an amount of money on a regular basis, predetermine or otherwise. Any amount is better than nothing at all! The nice thing about this is investment firms will allow you to automatically transfer money from your checking or savings account to invest in and expand your portfolio. Dollar based investing is going to be your new best friend. It allows you to purchase shares of stock or other investments in the dollar amount that's right for you, instead of otherwise, having to buy these investments in multiples of the stock price. Ultimately this form of investing enables you to put aside consistent amounts of money to be invested for the long run. The ability to purchase partial shares of stock is such a pertinent aspect of jump starting your portfolio and bringing you one step closer to realizing your dreams, goals and visions. Ah, automatic investment plan, so convenient in its ability to allow you to purchase shares or fraction of shares on a consistent basis with an out of site out of mind attitude.

I think we are all in agreement that, we are not going to get rich by leaving our hard earned dollar in a financial institution, such as our lovely banking system, earning less than a percent. Why not address this issue by taking advantage of an automatic investment plan and dollar based investing?

The U.S. Stock Market has been around for more than 200 years now, so its allure and resiliency goes without saying. It is a powerful tool for obtaining potential wealth. Of course their is risk involved with investing. It is not any different than upping your ante at the black jack table of your local casino in hopes of making more money. Think of the stock market as an auction, where it is the auctioneer's job to match buyers and sellers and get the best possible price for the seller. The selling price is established by how little the seller will accept the price the buyer is willing to pay. The stock market is essentially the same thing.

One thing that is certain, is that stocks have outperformed nearly all other assets, averaging a 14% RETURN since the end of WWII! Investing in stocks tend to bring about the highest level of risk. Stock investing can produce a rocky period of uncertainty, but also bring forth impressive upward trends. The longer you have to leave your money in stocks, the better your chances are, towards receiving a decent return on your investment. One key concept to adhere to is that, if you plan on taking money out of your portfolio, by selling stock in less than five years, you don't want to invest heavily in the stock market!

Having said that, another option would be to invest in mutual funds. Mutual funds have a larger range of diversity, reduced costs and professional management characteristics that are not representative within a single stock. Risks for the most part are not as dramatic, nor are the explosive gains and size able losses associated with single stock realized either since their is more of a balance and stability associated with investing in mutual funds. Mutual funds are a collection of stocks, bonds and cash from various sectors of the stock market. They can be in the financial, consumer services and goods, technology, oil and gas, health care, utilities, industrial, telecommunications and basic materials sectors or combination of more than one of these. Their is a wide variety of mutual fund styles available, from no load to load funds, low, moderate and high risk funds, small, mid and large cap funds, foreign or domestic.

Placing money in stocks and mutual funds, for instance, allows you to invest in companies you believe in, like and trust with hopes of making money. It is like having a tiny piece of ownership in these companies your investing in. Again, there are many investment options available besides stocks and bonds, however, without ex ceding the breadth and scope of this article, stocks and mutual funds will be the only tools I cover to some degree in this particular article.

To conclude this article I would like to stress two very important points that could play out favorably in your endeavors towards financial success through investing. They are diversify your portfolio, and keep your investments in line with your goals. By this I mean, balance out your portfolio by not placing all of your eggs in the same basket so to speak. Invest in more than one piece of the puzzle such as stock, bonds and funds. Invest in various risk types and sizes, and both foreign and domestic securities to allow you a balanced attack towards seeking financial gains.

Secondly, keep money that you may need in the short term out of more aggressive investments. If you have the luxury of setting aside money and time for a longer time period, a more aggressive approach is often the way to go in attempts of realizing financial growth on a much grander scale.

Take the time to get your ducks in a row before delving into the world of investing because like anything else in life, nothing is guaranteed! Seeking financial advice through a stock broker, or other financial analyst with the resources to aid you in your quest for financial freedom, is advise able. Establish goals and a plan of action for making these goals a reality. Take the time to track your investments now as well as those that you may possess down the road. Buy low and sell high is the key ingredient, but don't developer a sense of complacency in that dilemma all the time, since their are risks and expenses involved with pursuing that motto on a frequent basis.

Now go set your goals and attain them financially...