Q: I'm looking for the highest growth possible, as quickly as possible. Aren't there any good growth opportunities right now?
A: Given the turbulent financial environment of the past decade or so, two phrases come to mind when someone asks about "get rich quick" investments. The first is the old joke that the best way to make a small fortune in the stock market is to start with a large fortune. The second phrase is the name of a web site which champions sound financial practices. It's called GetRichSlowly.org, and while getting rich slowly may not sound exciting, you can refer back to the old fable of the tortoise and the hare to decide whether trying to do something quickly will give you the highest percentage chance of success.
Nonetheless, with rates on CDs, money market accounts, and savings accounts at near-microscopic levels, the desire to search for more productive opportunities is understandable. Here are some fundamentals to help you with your search:
- Know your risk level. High return potential means high risk - and never trust anyone who says otherwise. Understand how much money you can afford to put at risk, and keep this separate from the money you depend on.
- Pay attention to price. A great story is not enough - an investment also has to be at a reasonable price. Once everyone else has caught up to a great story, the big money has already been made.
- Avoid the bandwagon. Investors who chase the latest craze (see: dot-coms in 2000; housing in 2006; oil in 2008) tend to be run over by the bandwagon as opposed to getting rich on it.
Ultimately, you must prepare yourself for the fact that there are no easy answers - otherwise, everyone would be doing it. However, with some time, effort, and discipline, you can turn yourself into a successful investor.
Got a financial question about saving, investing, or banking? MoneyRates.com invites you to submit your questions to the "Ask the Expert" feature. Just go to the MoneyRates.com homepage and look for the "Ask the Expert" box on the lower left.