The younger you are, the more risk you can take. This saying describes college education, and investing in the stock market very well. When students enter college, it rare to know the exact outcome of your undergraduate career, but over time the roads becomes clear. We are given choices that build our character, test our willingness to achieve, and determine our risk factors. Correspondingly, when investing in a stock it is almost impossible to determine the outcome right away. Achieving long-term investment and academic achievement involve patience, diligence, effort, and psychological discipline.
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Scenario: Suppose you are a second semester sophomore at a public university. Every summer you work part time as a lifeguard and a waitress. Each job pays minimum, but working 38 hours a week has double your income. By the end of the summer you have earned $4,500. After paying expenses such as car insurance, school supplies, luxury goods, and hiding away some cash for the school year, final ending amount of is $3,000. After spending the summer researching various stocks, mutual bonds, and ETA’s you have come up with a simple and efficient investment strategy that can hopefully reach your investment goals. Since it is best to diversify your portfolio between three or four various industries, you have decided to go with investing in a single stock of your choice and a mutual bond. Due to the fact that you have minimum to invest it is best to separate your