1) Yes, there's an element of gambling, but- Imagine a casino where the long-term odds are rigged in your favor instead of against you. Imagine, too, that all the games are like black jack rather than slot machines, in that you can use what you know (you're an experienced player) and the current circumstances (you've been watching the cards) to improve your odds. Now you have a more reasonable approximation of the stock market. Here's a simple conclusion If you've been avoiding the market because you believe it's a casino, think twice.

Those who invest carefully over the course of many years are likely to end up as very happy campers...notice, we didn't say gamblers. 2) When inflation and interest rates are soaring, the market is often due for a drop...be alert. High interest rates force companies that depend on borrowing to spend more of their cash to grow revenues. At the same time, money markets and bonds start paying out more attractive rates. If investors can earn 8% to 12% in a money market fund, they're less likely to take the risk of investing in the market.

Many people will find that hard to believe. The stock market has gone virtually nowhere for 10 years, they complain. While the market occasionally dives and may even perform poorly for extended periods of time, the history of the markets tells a different story. My Uncle Joe lost a fortune in the market, they point out. Even poor market timers make money if they buy good companies. Remember that the market goes up more than it goes down.

Of course, severe drops can happen in times of low interest rates as well. For more info about colorplay online casino stop by the web-site. Don't let fear and uncertainty keep you from participating. Look for red flags in the financial news, such as the beginning of the recent housing slump or the international credit crisis. One of the more cynical reasons investors give for avoiding the stock market is to liken it to a casino. "The whole thing is rigged." There may be just enough truth in those statements to convince a few people who haven't taken the time to study it further.

"It's just a big gambling game," some say. Over the long haul (and yes, it's occasionally a very long haul), stocks are the only asset class that has consistently beaten inflation. The reason is obvious: over time, good companies grow and make money; they can pass those profits on to their shareholders in the form of dividends and provide additional gains from higher stock prices. But, after you've bought the stock, continue to monitor the news carefully.

Nearly every company has an occasional setback. 3) Do your homework. Study the balance sheet and annual report of the company that's caught your interest. Read the latest news stories on the company and make sure you are clear on why you expect the company's earnings to grow.