Whether you’re looking to increase your wealth or simply build your savings, investing is an effective strategy. But before you start investing it’s important to set clear financial goals, understand the risks and decide how much risk you’re willing to take. Learn About Investing

It’s also helpful to learn how the different types of investments work. For example, a stock represents ownership of a public company; if the company performs well and its share price rises you can make a profit when you sell the shares. You can buy individual stocks through an online investment account; or you could purchase funds, which contain dozens of different stocks. Bonds are debt securities; when you own bonds, you loan money to companies and other investors and earn interest or yield in return.

Learn About Investing: A Guide for Beginners

In addition, you’ll want to learn about diversification – the process of spreading your money across a variety of different assets to reduce the risk that one type of investment will lose value. And you’ll need to familiarize yourself with fees and taxes; these are often hidden costs that can eat into your returns.

Finally, successful investors regularly review their accounts and make adjustments based on their needs and the market’s changing conditions. They also read reputable financial news and follow industry trends; they stay away from hunches and hot tips (and that $7 latte). With the right resources, curiosity and a pinch of humor you can be on your way to Wall Street wizarddom.