CHRIS & COTY'S MONEY TIPS

IS NOW THE TIME TO INVEST?

With the stock market in such turmoil, it’s hard to know what to do. But where are you going to put your money so it will grow? Under the mattress? In the garden with the tomatoes?
There are other options, of course, such as CD’s (Certificates of Deposit) but this is a very illiquid investment. By illiquid, I mean you cannot put your hands on the money quickly. There are penalties for withdrawing your money before the end of the term you signed up for. The terms can range from 6-months to 10 years. What if you need your money during that period?

Follow up:

There are, of course, money market funds which is interest earning as well as being very liquid. In fact, they furnish you with a check book so you can use the money when you need it. There is usually a minimum amount you can withdraw such as $250, but it’s still liquid.

Okay, so now you have a place to put your savings that you may have to dip into once in a while. But what about your long-term savings? What about that money you have no intention of touching until you're fifty-nine and a half years old? That’s where the stock market comes in.

For the average investor, the stock market is for long term investments in sound companies that will continue to grow over the years. All that buying and selling you see on the financial network where people are “taking profits” is for the big boys; those dealing in millions of dollars. The average working person invests for the long term.

The easiest way to invest in the market on your own is through mutual funds. In the last twenty years, mutual funds have made it easy to invest small amounts of money and grow your portfolio without having millions to invest. You can contribute to most funds with as little as $50 a month.

If you now contribute to a 401(k) through your employer, you are already invested in mutual funds. This is the vehicle most retirement plans are invested in. And even though they have lost a lot of value with the plunge in the market over the last few months, the federal government is taking steps to insure that your investment is safe.

If you are young and have a good job, then you have plenty of time to recover from the investment problems of today. If you are facing retirement, it is probably a different story. But in the end, the stock market has consistently been a good investment even after the Great Depression of the 1930s, the market did recover and ultimately make money.

Be prudent, be smart, do your research and let your money grow along with American business.

Coty Fowler