Invest money

By Ian Sani.

Ok, now you have your money after saving it from the hard work you have done in previous years. So where can you invest your money? That is a million-dollar question. There is no same place for every one to invest. The first two thing you need to know before asking that question are:

• How much is your investing target return
• How much risk are you willing to take

So your answer might be, “I want a ten percent return with minimal risk”. Sounds realistic? Remember that the higher return you want, the riskier it will be. There are many kind of investment out there. The most common place to invest money are to stocks, bonds, mutual funds, real estate, and starting your own business. Each investment has their own characteristic. It’s your job to know their characteristic and match it with your preference.

Bond, mutual funds, and real estate generally have lower risk than stocks and starting your own business. With stocks you can loss your money in minutes. Imagine if you had bought Citibank stock at the start of the year at $7 per share. Guess how much it is now? It’s around $3 at mid July. A 50% drop in half a year. See how you can lose money from stock. The same applies if you own your own business. There are many companies that are closed at it’s first year. Imagine how much money you could loss this way.

If you don’t know anything about investing and want to leave it to the pros, then you can try mutual fund. A mutual fund is a professionally managed type of collective investment that pools money from many investors. Although it is professionally managed, it does not means that you won’t lose money from it. Those professional can also loss money, but at least their knowledge is a lot more than you.

India’s benchmark stock index jumped a record 17 percent, bonds rose and the rupee gained the most in two decades after Prime Minister Manmohan Singh’s Congress Party won nationwide elections.

Share trading was halted for the first time ever because of a surge in the Sensitive Index, or Sensex. The rupee climbed 3.1 percent against the dollar and the benchmark bond yield fell 16 basis points, the biggest decline in a month.

The subprime mortgage hit banks around the nation. Their stocks has plummeted last year, and nobody knows when it will stop. Business are currently very bad for them. It’s not a surprise to see loss from them. Analysts are predicting that up to 300 banks could fail. Many people now wondering if their money is safe in the bank.

During the crisis Federal Deposit Insurance Corporation (FDIC) made some changes about the deposit insurance coverage. FDIC is a federal government run entity that provides deposit insurance protection for participating member banks. The FDIC system was set up to bring consumer confidence in US banking system during financial turmoil.

Deposits at FDIC-insured institutions are insured up to at least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts—except for certain retirement accounts—will return to at least $100,000 per depositor. Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, was increased permanently to $250,000 per depositor in 2006.

The FDIC protection covers a variety of bank deposits: checking accounts, savings accounts, money market accounts, certificate of deposits (CD’s). However, does not cover non bank deposit type accounts and assets like – stocks, bonds, and mutual fund investments.

So if you have more than $250,000 what will you do?