How to invest money carefully

Investing money can be very daunting. Here is a little advice to get you started or at least give you enough information to investigate your options further.

CDs
The first and easiest way to invest your money with absolutely zero risk is to put it into a Certificate of Deposit, known as CDs. These are not so much an investment as a guaranteed return of usually about 4%per annum or part thereof.
You can select CDs from one month to ten years and as I said before this is not an investment so there is no risk involved. You are simply guaranteeing to lend a company or bank a certain amount of money for a certain length of time.
The only draw back to this is that once the money is in a CD you will not have access to it until it matures.
Other similar schemes include Treasury bills in the US and ISAs in the UK.

But if you wish to be a bit more daring then you can try actual investment in the stock market.

In this instance the very first thing you need to do would be to find a broker. Personally I would recommend Schwab, who operate both in the UK and the US. Once you have opened an account, which is free, you can invest online in the stock market, CDs and ETFs...

The different types of shares you can buy are Stocks in individual companies, ETFs or mutual funds.

Stocks:
Here you would buy a share in a particular company and your investment will increase or decrease depending on how much confidence the public and stock market have in a product.
For example, if you were to buy shares in an electronics company and the news reported that this companys products were faulty on a mass scale, the value of your shares would be likely to suffer a drop.

ETFs are an index of companies in the same industry, such as the NASDAQ, which combines a number of technology companies. The benefits of this is that as your shares are dependent on many companies, if one does badly for some time, the losses can sometimes be offset by gains in other companies within the same ETF. This is felt by some to be a more stable investment than individual stocks. You can invest in a wide range of ETFs from oil, technology and agriculture through to ETFs for emerging markets such as Russia or India.

Mutual Funds
I do not know as much about these as I do about ETFs or stocks but my understanding is that a mutual fund is similar in some ways to an ETF in that it is an investment comprised of investment in several stocks. The difference is that the companies comprising these funds are selected by Fund managers, who are usually individual people with great reputations for predicting which stocks will return the best investment. With the unpredictability of the stock market, this is pretty challenging to say the least.

How to decide?
Well whichever form of investment you choose, the best tool available to help you decide where to place your money is the internet. On yahoo, schwab and google among others, you can research the history and details of each stock, etf or mututal fund. You can see which companies comprise an ETF and mutual fund, how they have been doing in the last day, week, month and year to give an indication of whether they are in a growth period or decline. You can also read headlines about the company from trade press to see if outside factors could contribute to their position and on the schwab website, you are given indicators on whether they advise you whether a stock is a 'buy' or not option. They also indicate whether an investment is a good long term or short term investment. While the information given is not a guarantee, the research is thorough and I've always benefited from following their indicators

When to take your money out?
This is a very subjective questions, everybody speculates on the stock market and several million people make a living from doing just that. But as an unpredictable beast stock can be rising through the roof one day and then the entire stock market falls dramatically the next taking your profit with it.
My advice would be take your money out when you're happy with what it has returned to you and don't beat yourself up if you miss out on a little more, because it could very easily have been a little less.
Of course if your stock is plummeting out of control I would follow the advice of the experts. Sometimes if it's a strong industry like finance and your investment has dropped substantially, it may be worth leaving it where it is if you can in the hope you will regain a little more of it back in the long term.