First, let’s look at the basics.  If you are new to investing and don’t know much, there’s really no reason why you should be investing in anything other than stocks and bonds.  Real estate is another one you may know about and be interested in, be we aren’t going to talk about it here.

Should you Invest in Stocks?

Stocks are probably one of the most common investments out there, though not necessarily the most used.  Even if you know nothing about investing, you’ve probably heard of stocks.  Stock buying is ideal for those who are far from retirement and still great as you get closer to retirement.  Buying stocks is a little riskier, but if you have a long time to build wealth, you can take that risk and will earn more over time.

Should you Invest in Bonds?

Bonds are another common investment.  You might have savings bonds that you’ve received from family over the years.  Bonds are usually less risky and are better to invest in when you near retirement.  Keep an eye on the rating of the bond become low rated bonds can be just as risky or riskier than stocks.

Should you Invest in Commodities, Currency, Derivatives, etc.?

These types of investments are more for the advanced investor.  If you don’t know what they are, you shouldn’t invest in them.  Can you make more money with them than other investments?  Maybe, but maybe not.  Just like all other investments, they are a risk and you are taking a chance that you might lose money, or you might make money.  You have to take that risk.

If you are brand new to investing, while you learn, you should consider investing in mutual funds.  They are a great way to be invested in the stock market, bonds, or whatever investment you are interested in while not having to research yourself.  Later, when you are more knowledgable, you can take the new information you learn to try new things in your investing.

If you want to build your wealth and build it quickly, there is no better way than through investing your money.  Sure, it would be even easier and faster to win the lottery, inherit a large sum of money from a distant relative, or invent the next big thing, but all of those things have a much smaller success rate.

Why should you learn how to invest instead of just paying someone else to invest your money for you?

The more money that is invested, the larger and faster it will grow.  If you are paying fees and commissions to a financial adviser, that money is not getting invested, that money is not growing, and that money is not compounding.  Depending on how much you are paying your adviser or money manager, you may be severely limiting the growth rate of your wealth.

When you learn to invest yourself, you can effectively invest on your own.  You can invest your own money while simultaneously saving bundles on commissions and fees.  On top of that, because you are in charge of your own money, you know exactly where it is.  You don’t have to worry about trusting someone else with your money.

Wouldn’t a professional do a better job to earn you more money?

The stock market is unpredictable.  That means nobody, including “investment professionals”, no one can know for sure what stocks are going to earn the most money.  No one know where the markets will go for sure.  It is likely that over time the average return will be the same or close to the average return of the markets as a whole according to stock indexes such as the Dow Jones Industrial Average (Dow) or the S&P 500.

Once you read and study as much as you can about investments, including all kinds of investments, you can do very well to earn yourself a high return.  If you aren’t that confident in yourself, even after studying, you can invest in an index mutual fund and you don’t have to worry about it as much.

Even if you never choose your own investements because you decide to hire someone else to do it for you, you should still learn how ot invest.  If you know how it works, you can better understand your money and wealth and don’t have to worry as much.  If you know nothing about investing, you could easily get taken advantage of.