Updated: 11/3/2009 9:00 AM ET|
How much money should you invest?
If you're new to investing, it can look complicated. But it doesn't need to be. This is part 1 of 5 parts.
The editors at MSN Money have put together this Beginner's Guide to Investing to help you start putting your money to work.
Your investment strategy will depend partly on how much time you have and how much money you want to put to work.
(Watch the video below for details).
A few options to consider:
$50 a month or more, with no lump sum
It may not seem like a lot, but even small regular investments in mutual funds or exchange-traded funds can add up through compounding. (Read: "The power of compounding.")
A lump sum of less than $10,000
You have more options in this range, as many mutual funds have minimum-investment requirements of $500 to $2,500. The key is to make sure all your eggs don't end up in one basket. Invest in five or six different types of mutual funds. If U.S. stocks aren't doing great, your holdings in international stocks or real estate may help keep your overall portfolio afloat.
A lump sum of $10,000 or more
The trick here is not to jump into the market all at once, potentially putting all your money in just before stock prices tumble. One approach: Put one-twelfth of your money into the market each month for a year, a technique known as dollar-cost averaging.
Power of time
Time is a crucial element to any investment strategy. The sooner you start socking it away the better. How much, though? Check out the calculator below to see how far $50 or more a month goes. Once you're done, continue to part 2 of the beginner's guide.
VIDEO ON MSN MONEY
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[BRIEFING.COM] The drive for five continued today and it was a success. For the fifth straight session, the S&P 500 ended lower. Like the previous four sessions, though, the losses were fairly modest in scope. The S&P 500 declined 0.4%, bringing its total loss for the five sessions to 22 points or 1.2%. All in all, that still qualifies as a pretty tame slide considering the S&P 500 had risen 150 points, or 9.1%, over the previous eight weeks.
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