Every investor has heard of the NASDAQ, Dow Jones Industrial Average and S&P 500. Perhaps the most well known indices, the numbers we associate with them, function as statistical measures of the changes in the portfolio of stocks that make up their index. As it would be next to impossible to track every change made by every stock, investors have come to rely on indices such as these to track changes in the market.

The reason index investing is fast becoming a popular means of investing is due in large part to the indices simplicity and performance relative to other funds. Index investing is easy because rather than devote large chunks of time to researching actively managed mutual funds — whose performance relies on the intelligence and wisdom of a fund manager — the investor can simply invest in an index fund that tracks the specific index they are interested in. Index investing does not rely on fund managers, thus index funds are often referred to as passive funds.

Many new to index investing mistakenly think that actively managed funds always perform better. However, the truth of the matter is that index funds often perform just as well, if not better, than actively managed funds. More important, index investing allows the investor to circumvent the administration fees commonly associated with mutual funds.

So what index should you invest in?

For those considering investing in large, established U.S. companies, the Dow Jones Industrial Average (DJIA) is the index to consider. Comprised of the 30 largest and most influential companies in the country, the DJIA is typically seen as the least risky of all indices.

On the opposite end of the spectrum is the Russell 2000 index. This index measures the performance of smaller stocks that are often not included in the larger indices. For investors who are looking for bigger returns and are comfortable with risk, the Russell 2000 is worth considering.

However, investors should be aware that within each index are several smaller indices. Additionally, there are industry indices for those who want to invest in precious metals or telecommunications. As index investing becomes more popular, investors are finding more indices to choose from.

Index investing may not be as involved or exciting as other types of investing. But, for those who are seeking performance, not fees, and who do not want to spend the time researching mutual funds or individual stocks, index investing is the way to invest.

First and foremost, congratulations. Making the decision to start investing your money is one of the wisest decisions you will ever make. And while you might initially feel the pinch of a tighter budget, after a while, you’ll hardly even miss the money that you are socking away.

Perhaps the biggest question facing new investors is “how should they invest?” This fundamental question is also one of the most basic, and the answer is as open as the question.

When considering the basics, ask yourself the following question: do I have time to diligently research and manage my investments or would I rather have someone do it for me? Most folks will say they want to do the research and management themselves. However, they will soon realize that investing involves more work than they are capable of handling. Investment professionals exist to help you manage the world of investing. If you do not have the time or patience to actively manage your portfolio, hire a professional.

If you do want to conquer the investing world by yourself then you need to identify your investment objectives and base your investment decisions on that objective. Are you an aggressive or conservative investor? Do you plan on frequently entering and exiting the market or do you plan on buying and holding? What is your timeframe? Such basic questions must be truthfully answered before investing in a single security.

So, what should you invest in? That answer depends largely on how you answered the basic questions asked above. If you have the time to do your research and plan on being very active in managing your investments, you should consider investing in individual stocks. If you want to manage your portfolio, but don’t want to spend as much time doing research, you should look at mutual funds, ETFs and index funds. Lastly, you will want to consider investing in bonds and cash instruments such as money market funds.

The thing to remember when it comes to all types of security investing is that properly balanced asset allocation is key. You do not want all your money tied up in one stock or mutual fund. Instead your goal should be to create a well-balanced portfolio consisting of large-cap, small-cap and international stocks with a percentage of your portfolio invested in bonds and cash. This asset allocation percentage is determined by your investing style (aggressive, conservative, etc. and your time horizon). If you have many years before retirement, you will want to have the bulk of your portfolio made up of stocks. If you are close to retirement, you will want more stable and conservative investments in your portfolio (bonds, money markets, precious metals).

Investing in stocks is a great way to build your retirement nest egg. If you properly educate yourself on the basics, you will find the experience to be lucrative and positive.

For many investors, choosing to invest in gold is a way for them to protect their investment portfolios during periods of financial and economic instability, because while the dollar continues to plunge, gold investments have increased and held their value. Likewise, investing in gold allows an individual to diversify their portfolio as well as hedge against market downturns, inflation and a weak dollar (when the dollar goes up, gold prices go down). And as many people are finding out during these unpredictable economic times, diversification is a great insurance policy.

So how can one get started investing in gold? The standard gold investment vehicles include gold bullion and bars, gold accumulation plans, gold mining shares, gold options, and mutual funds. However, for the majority of casual investors the primary investment vehicles are gold bullion coins and gold mining shares. For investors looking for greater reward, playing the gold options market is the way to go. But be careful, higher rewards usually mean higher risks.

However, there are those who would argue that investing in gold is not such a brilliant investment strategy. Among other reasons, they feel that investing in gold is foolish because it has lagged behind stocks. In fact, over the last 80 years gold has only appreciated in value at an annual rate of 4.5 percent. Compare that to common stocks, which have increased a full percentage point higher per year. And if you factor in dividends and compounding interest, that one percentage point turns into dramatic gains compared to that of gold. Additionally, those bearish on gold point out that gold diminishes in value as the supply increases, whereas stocks increase in value and supply over time.

Precious metals, such as gold, are the “it” investment of the moment. However, your investment decisions should be made with great care. As with any investment, it is vital that you do your homework before investing. Because, while all financial advisors would tell you that it is important that you diversify your portfolio, how you do so can have far reaching implications.

The Bottom Line About Booking Cruises Online

Many cruise lines including Carnival, Royal Caribbean, Celebrity, NCL, Princess and Holland America will offer online pricing and booking, but even they still have some exceptions when you can only book your cruise by speaking with a person on the telephone.

Luxury and niche cruise lines like Radisson, Cunard, Seabourn, Silversea, Windjammer and CruiseWest simply do not offer online pricing and booking. You must speak to a live person to book these cruises.

Booking a cruise online that includes a land component can not be done. If you’re interested in an Alaska or European Cruisetour, or a Disney seven-night cruise and land package, you must speak to a live person for rates and availability. The reason you can’t book cruises online with these components is because they require a more complex reservation.

If you are a West Coast resident taking a cruise that departs from the East Coast, you may be entitled to a free hotel before your cruise. This is not available if you book cruises online. You need to call to see if you qualify for this feature.

Sometimes, cruise line reservation systems are unavailable due to scheduled or unscheduled technical issues. During these periods, you would need to speak with a Cruise Specialist.

If you are traveling with a group, you can not book a cruise online. You can book multiple cabins online, but you will get a better rate if you speak with a specialist from your cruise line of choice. Additionally, only a live agent can ensure that your cabins are near one another and that you are all seated together at dinner.

Do not book a cruise online if you think you may qualify for special discounts, offers or coupons. If you need a wheelchair-accessible cabin, special services or connecting cabins, or if you are booking multiple cabins, or back-to-back cruises, it is best not to book a cruise online.

A lot of hoopla has been floating around the news media lately about the “bubble” theory of real estate investing. That is, the theory that the real estate market is going to burst. In my opinion, the theory has no merit.

First, understand that there are three basic premises that undermine the discussion of a real estate bubble:

• There is no national real estate market.
• The real estate market doesn’t explode or crash.
• The market has limited relevancy to the shrewd investor.
• The real estate “market” is based on local economies.

When people speak of the real estate economy, they are using nationally-based statistics. For example, “Fortune” magazine reported recently that since the early 1960s, average residential real estate values have never had a down year. This statement is true. But while these numbers are measurable, they do not reflect the intricacies of local real estate markets.

The stock market is based on the national, even the world economy. The real estate market is based on local, and, in many cases, micro-local economies. What’s happening in Los Angeles does not directly affect what’s happening in Toledo.

True, certain factors such as interest rates affect all the markets. There really is no broad barometer to measure the entire housing industry in the U.S. average prices, average new homes sold, and average homes built nationally have little relevance to your market.
And, within a particular city that is doing well, there may be certain neighborhoods doing poorly for a variety of reasons, such as over-building of new homes.

So while statistics, calculations, and economic factors are relevant, so is common sense: Take a look around and see what’s really happening. Talk to real estate agents, investors and lenders in your area for a better picture of what is going on.

So do not run for the hills when you consider real estate investing. There are plenty of reasons to invest in something that will always have value. The market will inevitably go up and down, but real estate is a safe bet, so educate yourself, then invest.