There are no guarantees in investing, unless you're putting everything in a savings account insured by the federal government, and even then there's always a small chance that the government will do something extremely stupid and kill the FDIC. If there weren't any risk there wouldn't be any return, but you need the return in order to make up for the loss of value due to inflation.
The best way to make sure yourself secure is to make sure your portfolio is diversified - so that the small chance of losing money on anything is spread out among a lot of anythings. This doesn't just mean having lots of different kinds of stocks, but having some stocks and some bonds and some securities, and different kinds of each and so on.
And take comfort that you're saving now, time gives you security too because the stock market does gain lots of value over time. See the graph in the middle of this page (http://www.freerepublic.com/focus/f-chat/2085951/posts) for an idea of how it gains value over time. You may lose money in the short term, but not as much as you will make in the long term, which you can see because the stock market as a whole has gained a lot more value in the last twenty years than it lost in even the most recent really nasty recession.
Because money is itself a giant fiction that we tell ourselves about how things have value, it's not something that you can ever derive one hundred percent total certainty of security from. But you can get pretty close by diversifying and investing early.
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timeasmymeasure
no subject
Date: 2011-06-07 05:02 pm (UTC)The best way to make sure yourself secure is to make sure your portfolio is diversified - so that the small chance of losing money on anything is spread out among a lot of anythings. This doesn't just mean having lots of different kinds of stocks, but having some stocks and some bonds and some securities, and different kinds of each and so on.
And take comfort that you're saving now, time gives you security too because the stock market does gain lots of value over time. See the graph in the middle of this page (http://www.freerepublic.com/focus/f-chat/2085951/posts) for an idea of how it gains value over time. You may lose money in the short term, but not as much as you will make in the long term, which you can see because the stock market as a whole has gained a lot more value in the last twenty years than it lost in even the most recent really nasty recession.
Because money is itself a giant fiction that we tell ourselves about how things have value, it's not something that you can ever derive one hundred percent total certainty of security from. But you can get pretty close by diversifying and investing early.