Wednesday, December 9, 2009

Is It Safe To Invest In A Roth IRA In Today’s Economy

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I was meeting with some friends the other day and one of them asked me is it safe to invest in a roth ira in today's economy. I can see how it can seem like a valid question considering the state of the economy today. However, the question is a really misguided because a Roth IRA is only a special account allowed by the tax code that is given special tax treatment. You could open Roth IRA and never lose money if you invested it in CD's. A Roth IRA, like a regular IRA, are just types of accounts we can open.

So, what I think they were really wanting to know was is it safe to invest in today's economy. While it also might seem a little riskier now to invest in the market, stock market investing is always risky. Investing today is no different than investing at any other time. In any market, you always want to make sure that you are investing "with" the market and not against it. You can judge what market direction the market is headed by how you feel, how your friends feel or even by how the media feels. You have to look at the one thing that can tell you whether it's a good time to invest today and that is the market itself.

Determining market direction is the first step to figuring out if it is safe to invest. After you do that and are confident that the market direction is trending upwards, you need to then only pick the best stocks with the best earnings and with the strongest institutional support. And even, when you do all of that, you need to make sure that you always realize that you can always be wrong and that the price of the stock can go down no matter how good it is. The best way to learn about the market is by studying it yourself. Get started today.

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