Writer choice and literary autonomy

To get started investing a number of events must take place. The desire to invest is one that can be fulfilled quite easily if one knows a number of basic items. Those items include questions such as, why do I wish to invest? A primary purpose for investing from the perspective of most individuals is so they can make money, and though most would love to make a 'quick killing', the majority of investors seek to invest in order to have the financial well being that comes with long-term investments. This is a concept that most investors know and understand well, although it is at times extremely difficult to remember when watching stocks go through the ups and downs of a daily market, and it is especially hard when watching your portfolio fall by the amounts and percentages that most investors felt in 2008 and continue to witness during 2009. One recent article informed readers that "some 300 articles were published last month telling investors 'don't panic' or 'not to panic" (Birger, 2008, pg. 47). The article then went on to show that now just might be the perfect time to panic and that "at the very least, it's a good reminder to take a hard look at your financial plans and to reevaluate how much market risk you can truly withstand" (Birger, pg. 48). When deciding whether to invest in stocks, bonds, mutual funds, real estate or other long-term investment vehicles, knowledge is the key to success, although even the most knowledgeable can get slammed in the marketplace as evidenced by Phillip Goldstein.

Goldstein is a hedge fund manager and an investor in Nuveen funds. During a recent interview he said "the common shareholders are getting killed...Nobody in their right mind ever thought they would take a hit" (Strahler, 2008, pg. 1). Some of Nuveen's funds have plunged by over 70% in the last twelve months. That translates into a $100 bill now being worth $30, which is not a good thing if you are attempting to build a nest egg for yourself. Owners of stock shares are partial owners of the companies in which they own stock. The shares give the owner certain basic rights and can be traded on an exchange such as the New York Stock Exchange (NYSE) or the National Association of Securities Dealers exchange (NASDAQ). Some of the obtained rights an investor is granted upon the purchase of shares of stock include the owner's right to vote and the right to any dividend the company may declare. There are different classes of stock, preferred stock and common stock being the two most available to a normal investor. If the investor desires to invest a small amount of money on a monthly basis, or does not wish to be bothered with picking individual stocks, then a mutual fund might work best. A mutual fund invests the accumulated monies from individuals in certain types of investments. Funds that invest in bonds, stocks, growth stocks, dividend-producing stocks, top ten stocks, emerging market stocks and a myriad of others are available to the individual.

An advantage that can be gained by investing in mutual funds is that it has a professional manager that buys and sells on a daily basis the investments contained within the fund. Investors should be knowledgeable concerning what it is that mutual fund managers are investing in. As stated above, many funds are currently losing value because of what they are invested in. However, even during bad times good investments can be found. Profitability for many corporations took a hit due to the high oil prices of 2008. One recent article states, "high energy prices have started to put a dent in corporate profits. But surprisingly, one industry that relies heavily on oil has not been hurt: the railroads" (La Monica, 2008, pg. 35). Investors who had the foresight to invest in railroads would have seen their shares go up in value while the vast majority of investors were witnessing the exact opposite. Another example of smart investing would be to invest in shares of stock outside of the United States. One financial writer for Money magazine recently told readers "you couldn't help but marvel at how much brighter the economic future looked beyond our shores" (Lim, 2008, pg. 109). Huge amounts of money flowed from the United States to what were supposedly safer havens. As Lim states in the same article, "As the financial crisis spreads abroad, it's clear that foreign stocks haven't saved your portfolio" (Lim, pg. 108).

As mentioned above, mutual funds sometimes invest in bonds. Bonds are different from stocks in that the investor in bonds does not own a share of the company, instead the company or institution is borrowing money from the investor with the promise to pay it back at a certain time with accumulated, or paid out dividends. Bonds are not normally as volatile as stocks, and therefore this investment does not normally have the capability of providing as high a return as stocks do. One sure method of not losing any money in either the stock or the bond market is to invest in other vehicles, such as real estate. The problem with that idea is what took place in 2008 (and continues today). Many investors in real estate watched as the value of their properties fell by large percentages as the real estate boom became a bust. Even institutional investors are looking for other investments. Some institutional managers are looking at "global real estate and commodities...Treasury Inflation Protected Securities (TIPS) and alternative investments like market-neutral funds" (Segal, 2007, pg. 213). Novices and experts alike oftentimes find themselves watching their investments lose value instead of gain. In the long run however the stock market has provided a return much better than that offered by money markets or bonds. The stock market is not for the faint of heart, but for those who brave its fickle hearth, rewards can be quite fulfilling.