I have some money saved, should I invest in the stock market?

I am no longer a fan of the stock market, as I lost a lot of money when the market crashed.  In fact that is the main reason I turned back to running my own business and web marketing.  At least with your own business you control your fate, and you aren’t at the mercy of people who manipulate the market (I’m still a little bitter about it as you can see).  For those that do choose to get into the market anyway, you may like trading the Indexes.  It is much easier to track (daily announcements on radio and almost any finance homepage), and they tend to outperform most mutual funds. 

The stock market is basically high stakes gambling for the beginning investor.  You read up on a company, and hope that they become successful.  If they succeed, the price goes up and you make money.  If they fail, you lose your money.  Even when things are looking profitable you can never count your money from the market until you sell the stock.  One day you may make large profits and feel untouchable, only to watch them disappear the following day as the market crumbles.  This type of investing is not for the faint of heart.

Be wary of the market advice out there.  Everyone states to “Diversify your portfolio,” meaning buy stocks in several different types of unrelated companies (Sectors like medical, oil, industrial, etc.) however most famous people that have made it big in the stock market did it on one large gamble.  They came across what they perceived to be a good opportunity, went all in buying as many shares as they could, and when the stock performed well they made a lot of money.  Only after they became successful did they promote diversification.  What you don’t hear about are those that invested heavily on a position and ate a huge loss.  These people are the majority.

There are many people that make a great living investing in the start market, just ensure you know what you are getting into before proceeding into this type of investment.  Remember we are in a recession, and while the market has somewhat recovered, we have not fixed the issues with our economy that got us into this trouble in the first place.

I am an advocate of keeping money in a high interest savings or checking account where it is safe, until you have enough put away to start your own business.