MSW PROGRAMS DISTANCE EDUCATION

In many instances, the differences between great rewards and huge losses are subtle. However, before you can embark anew or jump back into the game you must ask yourself several questions wrapped into one.

They can be lonely questions because only you can answer them. It involves not only how much money you feel comfortable investing but it also takes into account the level of risk you are comfortable with.

First, does your financial condition permit you to invest; second, can you assume the current risk implicit in the markets; and third, is the market a safe place for you to be. Let's take them one at a time.

Your Financial Position.

One point should be made clear at the outset: you don't have to be wealthy to invest. In the past, insiders have trumped the belief that stock ownership is a rich man's game but with approximately 50% of american households currently in the market that is no longer the case.

The goals of the small investor is not of enlarging their fortune because clearly they currently don't have one but to make available some money, however small, for the purpose of growing it over time. Regardless of your income level, investment is possible if three conditions are met:

• 1. If you are relatively assured of a steady income. Of course, these days nothing is set in stone. 2. If you are meeting your current household expenses and obligations.
• 3. If you have cash reserves with which to meet unforeseen emergencies. You have to decide how much but I would suggest enough to cover 3 months of living expenses.
• Of course, these conditions are simply safeguards due to the inescapable fact that stock prices fluctuate and that your judgment of when to buy, when to sell and how long to hold should never be dictated by outside circumstances. Investment should be undertaken only with funds you can honestly and legitimately earmarked as discretionary.

A reserve also enables you to pick and choose. Whether you have a few hundred or a few thousand lying around should not automatically mean that it's time to invest it. What's the hurry? As the professionals say, "The market is always there." If the trend isn't to your liking or price's are over-valued a reserve allows you the luxury of waiting for more favorable conditions.

• Finally, a reserve permits investment over a period of time rather than all at once. Some "experts" feel you should back what seems to be a good situation with all the investment funds at your command. Others will warn against greed and advise partial investment to spread the risk.

This article is not the place to discuss the merits of either philosphy. The point is to give yourself the flexibility of moving whatever way "your" judgment dictates.