America Saves, Do You?

Beginning February 25^th, individuals and organizations around the country, including the Kentucky Cooperative Extension Service, will participate in “America Saves Week.” This annual event was started by the nonprofit America Saves, which works to raise awareness of how best to save money.

America Saves Week encourages you to find ways to make your money grow faster. One of the best ways to save money is to make your savings accumulate interest. When the interest compounds, it accrues interest on top of previously earned interest, so it grows more quickly. Putting your money into a mutual fund is another way to make your money earn you more money. A mutual fund is a diversified portfolio of stocks managed by an investment company. The risk of loss is small because the funds hold stock in many diverse industries, yet the returns can be very beneficial. Savings bonds are another choice. These are certificates that attest that a company or government will pay you back the bond price plus interest once the bond matures. Both of these options reward you just for saving and are great choices for new investors. However, putting your money in the stock market, mainly through mutual funds, will earn you money much faster than savings bonds and interest earned in savings accounts. To be fully diversified, you will want money in various types of savings and investments.

READERS, what do you think?

Do events like this encourage you to become more involved in your finances?

Reference:

America Saves. (n.d.). America Saves Week. Retrieved from http://www.americasavesweek.org/home-2.

Is It Okay to Invest in Stocks?

 Recently, the U.S. stock market has experienced an amazing rebound with stocks nearing historic highs. Although stocks are doing very well, people are still hesitant to invest in the stock market since the recession of 2007-2008.. Even though the nation is no longer in a recession of 2007, people still fear losing all their savings in a volatile market. People still feel the need to protect their money by moving it into more secure investments, such as treasury bonds and saving accounts in banks. However, stocks yield much high returns for the investor over the long run than such "safe" investments. Stocks do fluctuate, and investors will likely lose money sometimes.  But young investors should still consider stocks and here's why:

Over a 20 to 40 year period, stocks have almost always yielded higher returns than all other types of investments. The key is having a diverse portfolio of stocks and be prepared to hold it over many years. Short-term investing is particularly vulnerable to market fluctuations that often resolve themselves over time.

Quickly trading shares can hurt your bottom line. Buying and selling stock shares over the short term is known as trading. Trading stocks rapidly like you may see investors doing on TV can quickly increase your losses because of fees. Stock brokers charge higher fees for quick trades. By trading more often, you will also have to pay trading fees more often and pay higher taxes. Also, quick trading does not allow you to extensively research your stock choices. There’s too much information to keep track of if you’re making trades all the time, meaning you have to do it full-time if you want to do it well.

Diversifying the investment portfolio will help protect you from devastating losses. An investment portfolio is the set of assets that you own.  Diversifying your portfolio means  that you own stocks in many different types of industries. For example, you may own stocks in an exotic restaurant chain, a video game company, a soft drink company, and a textiles importing business. If the restaurants and textiles stocks drop (due to new international laws for imported food and clothing), your investments in the other two industries will likely be unaffected. Therefore, you have minimized your loss more than if you had invested in one industry alone. In practice, you will actually need to diversify your investments even more than in this example. Buying into a mutual fund is an excellent way to do this, as it allows you to own shares in many companies and industries. But there are good and bad mutual funds to choose from, which will be the subject of another entry.

READERS, what do you think?

Would you ever invest in the stock market?

Is there a stock that seems  worth the risk?

References:

Cable News Network. [n.d.]. Money 101: Tips for investing in stocks. CNN Money. Retrieved from http://money.cnn.com/magazines/moneymag/money101/lesson5/index.htm.

Yousuf, H. (2013, February 5). Individual investors still nervous about stocks. CNN Money. Retrieved from http://money.cnn.com/2013/02/05/investing/individual-investors-bull-market/index.html.

Video Post: "Clever Family Games"

When it comes to holding a family game night, many people are concern that they will eventually get bored with playing the same game over and over. However, today's popular games are much different from the predictable "Candyland". This news report discusses three popular games that can hold the interest of kids, teens, and adults. The game changes each time you play, so you never know what strategy will win.

READERS, what do you think?

Would games like this hold your interest? Would you likely stay home more to play?


Reference:
ABC Channel 6. (n.d.). Parenting: Clever Family Games. [Video file]. Retrieved from http://abclocal.go.com/wpvi/video?id=8496615.