Worst Stock Market Investment
At the same time, it can also be one of the most profitable undertakings.
It is therefore only normal you may have reservations about actually trying your luck in the stock market.
The best thing to do is get a stockbroker to handle your stocks initially. He will be able to give you professional and dependable stocks tips and advice.
It is also a good idea to find a friend or an acquaintance who already has some experience with dabbling in the stock market. They will be able to give you stock tips and advice for free.
Where to not put your money is one of these valuable pieces of advice.
One of the worst stock moves you can make is with variable annuities using the premium of your insurance.
A variable annuity is an insurance contract that allows you to invest your premium in mutual fund-like investments.
This sounds good in paper, but if you look at it a little harder, you'll find they are bad investments in the long run for the following reasons:
- Tax cuts. Ordinary investments in stocks and mutual funds qualify for low capital gains treatments, and therfore less taxes. Your gains from investing your premium, on the other hand, get taxed as income as soon as you withdraw the money.
- Early withdrawal penalties. Insurance plans are designed for retirement. Taking out money from your premium entails a certain amount of penalty from both the insurance company as well as the government. If you withdraw your profits, you will be penalized.
- Death benefit. If your stocks are down upon your death, your beneficiaries can get as much as the investments you put in. Unfortunately, if your stocks are up, they get taxed as a regular income.
- Costs. Annuities with insurance features are actually more expensive than ordinary mutual funds. The more insurance features your annuity has, the more annual fees they have.
It is best to diversify both the time and the place where you invest your money.
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Stock Market Trading
Stock is ownership in a company. Each share of stock represents a small piece of ownership. The more shares a person holds, the more part of the company they own. The more part of the company a person owns translates to more dividends they earn when the company profits.A stock market is a market for the trading of publicly held company stock as well as associated financial instruments such as . . .