Stock Market Investment

Forbes Special Situation Survey Newsletter
The Prudent Speculator Newsletter
They advertise rarely. It's been around 50 years. The successful people already have it.

Stock market investing is not for the weak of heart or people who are prone to anxiety attacks. However, the profits from the millions of folks from around the world who do place their money into the various stock markets enable the growth of nations. Folks who take a keen interest in things stock market can make a hefty fortune with diligent research and cautious, but continual investing. Approaching stock market investing as a hobby can generate peanut money, but for peanut butter, you must approach it like a job.

Numerous companies and individuals promise faithfully that they have the entire answer to prudent stock market investing totally sewed up, and if you'll just follow their lead, you'll be a winner for sure. Ask to see their stats.

In the meantime, there are alternatives to the stock market, which may just satisfy your cravings for making your boodle the investment way... One such investment scheme is called a money market account.

A money market account is a fixed income security similar to bonds, except they mature in a far shorter space of time, usually a year or less. Expect to see these securities issued by gubments and larger financial institutions. They are safe, but offer much lower rates of return compared to a good day on the stock market.

As for how money market accounts works... What happens is that your money is thrown in the pile with thousands of other investors. Your fund manager then invests the money for the group and you receive your fare share of the profits. Types of money market securities include:

Treasury bills - these are short term securities that mature in less than one year. They are considered risk free and because of this have very low rates of return.
Certificate of deposit - this is an instrument where you deposit your money for a certain period of time (three months to 5 years) at a certain rate of interest with a bank. They have a slightly higher interest rate because there is a chance that the bank will default although this is highly unlikely.
Commercial paper - this is a short term loan issued by a corporation. They are very short term and mature in 2-9 months; these investments are very safe because it is easy to predict where the company will head in the next few months.
Banker's acceptance - this is a short term investment that is issued by a non financial entity but guaranteed by a bank.
Euro dollars - this has nothing to do with Europe or Euros. Simply put Eurodollars are deposits in overseas banks. Deposits are usually very large (in the millions) and are out of the reach to most investors.
Repos - this is short for repurchase agreement. Repos are part of securities like treasury bills; they involve selling a security such as a treasury bill and then buying it back at a later date for a predetermined price. They are very short term (from a few days to a month at the most)

The question the novice investor much ask is, "Do I feel lucky? Well do I punk? You talkin' to me? I'm the only one here..." Well, actually, there is no use in going crazy over it. That comes later when your big stock market score goes bust.

As a novice investor, you have your basic three options. Hire a stock broker. Learn stock trading the old fashioned way, by reading a book, or the newer way, by geeking out over a hot computer, or finally, just being prudent and investing in no risk, low yield money market accounts.

Money market accounts are nearly as sexy as high risk stock market investments, but they are a whole lot more fun when the economy does a 90 one sunny day. Something to think about before you invest all of your dead uncle's inheritance money in pork bellies.

Of course, there are two ways you can do your part to do your utmost to insure stock happiness and that is to invest in The Prudent Speculator, a Forbes Publication, and the Forbes Special Situation Survey. As investments go, this is pretty much a no brainer. Buy at a low cost, and reap HIGH rewards!