Work-based retirement plans deduct your contributions from your paycheck before taxes are calculated, which will make the contribution even less painful. Once you're comfortable with a one percent contribution, maybe you can increase it as you get annual raises. You won't likely miss the additional contributions. If you have a 401(k) retirement account at work, you may already be investing in your future with allocations to mutual funds and even your own company's stock.
But this isn’t your typical market, and you can’t show up and pick your shares off a shelf the way you select produce at the grocery store. Individual traders are typically represented by brokers — these days, that’s often an online broker. You place your stock trades through the broker, which then deals with the exchange on your behalf. (Need a broker? See our analysis of the best stockbrokers for beginners.)

Berkshire Hathaway -- Berkshire Hathaway is a conglomerate with more than 60 wholly owned businesses, including household names such as Geico, Duracell, Dairy Queen, and many more. The company also has a massive $230 billion stock portfolio, much of which was hand-selected by Warren Buffett, arguably the most successful investor of all time. Berkshire specifically targets businesses and stocks with durable competitive advantages and has a fantastic 55-year track record of executing on its vision of using its businesses to generate capital to reinvest in other businesses and stocks.


E (Very Weak) - The stock has significantly underperformed most other funds given the level of risk in its underlying investments, resulting in a very weak risk-adjusted performance. Thus, its investment strategy and/or management has done just the opposite of what was needed to maximize returns in the recent economic environment. While the risk-adjusted performance of any stock is subject to change, we believe this fund has proven to be a very bad investment in the recent past.
You may see a number of sales charges called loads when you buy mutual funds. Some are front-end loads, but you will also see no-load, and back-end load funds. Be sure you understand whether a fund you are considering carries a sales load prior to buying it. Check out your broker's list of no-load funds, and no-transaction-fee funds if you want to avoid these extra charges.
In that case, it is possible to invest passively in capital markets. This means that a private investor puts aside either a lump sum or an amount each month and the money is invested into a fund. That fund contains the savings of lots of other private investors and is managed by a professional equities investor. The fund will then be invested in an equity market (such as the NYSE) or a sector (such as energy).
While some people do buy winning tickets or a common stock that quadruples or more in a year, it is extremely unlikely, since relying upon luck is an investment strategy that only the foolish or most desperate would choose to follow. In our quest for success, we often overlook the most powerful tools available to us: time and the magic of compounding interest. Investing regularly, avoiding unnecessary financial risk, and letting your money work for you over a period of years and decades is a certain way to amass significant assets.

Buy in thirds: Like dollar-cost averaging, “buying in thirds” helps you avoid the morale-crushing experience of bumpy results right out of the gate. Divide the amount you want to invest by three and then, as the name implies, pick three separate points to buy shares. These can be at regular intervals (e.g., monthly or quarterly) or based on performance or company events. For example, you might buy shares before a product is released and put the next third of your money into play if it’s a hit — or divert the remaining money elsewhere if it’s not.
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