What is the Best Investment?

This question is probably asked all the time.  People want to know what the best investment is so that they can put their money in it.  If they can put their money into the perfect investment security, they will make the most money possible.  The thing is that nobody can say what the best investment is.  One person might think stocks are better because you can earn more money where another people feels bonds are better because they are less risky.

The real question you should be asking is what is the best investment for you?  There is only a certain amount of risk you should be taking on and that will change throughout your life.  If you are investing for retirement, you can take on more risk in your 20s than in your 40s.  If you are just investing to increase your wealth, you’ll probably take on more risk as a 40 year old than a 40 year old who is investing for retirement.

Another question is how much time and effort you plan to put into your investments.  If you aren’t very skilled at choosing stock but you want to invest in it, you may decide to try index investing.  This is where you buy into a mutual fund that is invested into a particular index.  It is a good average that reduces risk but you still get good stock returns.

Finally, there is a bit of a preference factor in there.  If bonds bore you to death, don’t invest in them.  Find other ways to reduce risk.  To many people, investing is a chore, but if you find something you’re interested in, it doesn’t have to be.  You might even decide to invest in a friend’s business because you feel good about it, want to help them, and want to get in on the business.  Take your time researching and choosing and you’ll be well on your way to riches.