How to Invest in the Stock Market Safely

While the stock market has historically posted higher returns over time than all other major asset classes, many investors balk at the risk and volatility that must be endured to achieve these gains.

Difficulty: Moderate

Instructions

1. This dilemma can be at least partially resolved by investing in a relatively new type of Certificate of Deposit, known commonly as a market-indexed CD. This type of CD allows investors to reap a percentage of the gains of the stock market with no downside risk.

2. Investing in these instruments is easy. Simply ask your broker or investment consultant if they offer market-indexed CDs. If not, they are available online, at such web sites as www.everbank.com.

3. These CDs can be either cashed in or rolled over just like any other CD at maturity. The returns that you receive on them will vary according to market performance.

Tips & Warnings

• It is possible to receive very little or no gain from market-indexed CDs if the markets perform poorly.
• These instruments are also fully taxable, so be prepared to report a portion of any gain that is received each year.
• When investing in this type of CD, you need to know the time horizon that you intend to invest for. Generally, these CDs are available in 3,5 or 7-year maturities, although longer or shorter terms may be available.

[pondpond]

on 12/14/2008 very good tips for all investors around the world who has invest a lot of money and now stucked on the financial crisis.