Most of us understand that investing in the stock market is something that we’re supposed to do — but that’s very different from saying that most of us are making the right decisions. In fact, studies show that only about half of all Americans own stock. And while it’s certainly true that this is at least partly influenced by the financial situations of many Americans, it’s also true that too few people who can afford to buy stocks are doing so. Whether it’s fear of risk or lack of knowledge, one thing is clear: most of us could stand to learn more about the stock market and start — or improve — our investing.

Investing: The Only Real Option

It’s no secret that most Americans are unprepared for retirement. But our lack of retirement savings doesn’t merely indicate bad savings habits. In fact, it’s possible to have good savings habits and still not be on track for retirement: most experts agree that investing is the only realistic way to build enough wealth for a comfortable retirement.

That’s because investing, when does right, offers a rate of return that outstrips the interest rates on savings accounts and helps us overcome the force of inflation. With the power of compound interest, money we invest early in our careers can become a nice nest egg for retirement.

In short, it’s not just that you should invest: it’s that, if you want to retire comfortably, you pretty much have to.

How to Invest Intelligently

Alright, fair enough — you have to invest. But how can you do it?

Investing isn’t quite as daunting as it may seem. In fact, it’s possible to get into the market with a very simple strategy and begin to build wealth without having to learn all of the ins and outs of the stock market. Here’s what you need to know.

For starters, let’s talk about what you should invest. You’ll need to hold onto some cash in an emergency fund, because you’ll want liquid assets in case you need cash in a pinch. And you may also want to keep money in a savings account for future big purchases. But beyond those sums, you should be investing most of the rest of your money so that it can grow for you.

Investing can be risky, but you don’t want to lose your retirement. Put a solid chunk of your cash in relatively safe places. Good examples include index funds that track large, safe market indices and target-date funds designed to manage risk in a predictable and proper way.

You’ll also want to take full advantage of tax-sheltered accounts like 401ks, IRAs, and Roth IRAs. Be careful, of course — this money will be penalized steeply if you dip back into it early, so only invest what you can afford to not touch for a long time. But do try to get as much as you can out of these so that you can reap the tax benefits and maximize your retirement savings.

Next-Level Investing

Investing safely for retirement can be incredibly simple, but part of the joy of investing is staying one step ahead of the market. If you feel you can afford it, try taking a chunk of your money and managing it more actively. Advanced trading strategies like Fibonacci trading can be more complex — and, sometimes, more lucrative — than the basic methods we talked about above, so consider familiarizing yourself with more advanced parts of trading and investing.

Whether you choose to become a market wiz or simply want a “set it and forget it” investment style, remember this: you should always be saving money, and you should always be investing the money you save. Investing is your surest path to a stable financial future, so keep at it!

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