Saving is a major issue in the USA. Too many people live without thinking about the need for a budget and the elimination of waste. That is typified by the level of credit card debt where a high rate of interest is applied every month. If people are to be able to save and invest their future they must get rid of such waste; a realistic quick loans can do it but it still requires self-discipline not to build up debt again and think about the future.
As your career progresses you may become more and more interested in investment. You should because there will come a time when the assets you create through your working life may be needed to provide you with a comfortable retirement. While the Social Security System does provide benefits they are nothing like sufficient to provide for a comfortable retirement and the chances of those benefits remaining the same never mind increasing are being brought into question.
Investors had a difficult time during the recession and there are still inherent risks that amateurs face by placing their faith in just a small segment of the investment arena. The best way to handle investment is to spread the risk across the various alternatives so that you can bear one part struggling, even temporarily, as long as others prosper. No one loses money until they cash in an asset but time can be an enemy and it is not always possible to hold on and wait for recovery.
The danger is to see growth and instinctively want to join in. The growth may not be sustainable and if you buy when a stock is highly priced you may be too late to gain any advantage. It needs experience to read how the markets will go and even then it is not an exact science. The markets grew towards the end of 2013, a sign that the recession was going but that growth slowed fairly quickly. Buyers early in 2014 had often missed their chance, certainly if they had intended to cash in fairly quickly.
The S&P 100 and 500 have generally been seen as safe medium term investments but there are also opportunities in different sectors from time to time as a further factor. In 2014 it was technology as the Internet and smart phones have become part of everyday life. However the principle of diversification provides a hedge against the unexpected. Healthcare has been another growing sector with little risk.
What proportion you decide should be put into stocks is a personal choice though it would be silly not to seek the advice of investment experts who spend each and every day working in this field. Unless you do your chances of being on top of everything are limited.
It is sensible to look beyond the current environment and not just chase market trends because you can be too late to profit if things change. Bonds and equities do not necessarily move in the same way and when the markets are volatile your money must not be purely concentrated in them. There are three types of bonds, Short Term, Intermediate and Long Term to choose from, and your choice may well depend upon your personal goals, often with age a major factor.
There are some safe investments with guaranteed returns but naturally they provide safety but limited growth. Everyone needs to balance their desire for growth with the risks involved. In later life risk can be fatal. You have little time to recover from a reverse. You money has been hard enough earned to lose it when it was going to provide a comfortable retirement.
If you have learned the lesson of eliminating waste and lived with a sensible budget you will be able to build your assets by investing. Perhaps you have bought real estate which over the medium term has been largely successful? Short term investments are rarely guaranteed to provide growth whether they are stocks, real estate or anything else. It is important to cut out waste such as credit card interest and plot a safe path, using whatever help you need. If you have yet to act on securing your future you should do so now.