they estimate their portfolio lost 30% last year, overall they believe they have had good fortune and wish they had started investing earlier. “If you look at the power of compounding, the sooner you start saving, the less you have to save on the back end,” says Simmons.
TRUST THE PROCESS
According to Ibbotson Associates, an investment research and consulting firm in Chicago, the Standard & Poor’s 500-stock index, the benchmark that tracks the performance of the stocks of 500 U.S. large companies chosen by S&P as representative of leading industries, averaged a return of 11% from 1926 through 2000. That’s consistency over the long term that you can trust in.
Beginning investors should understand that investing is based on supply and demand. “The markets are a mechanism created by people who want to buy and people who want to sell,” says Profit. “The markets exist because companies need capital.” That need for capital gives you the opportunity to profit from the ingenuity and entrepreneurial spirit of others. So what are you waiting for? Investing is how wealth is created. Learn your lessons and reap the rewards.
A LIST OF RESOURCES TO HELP YOU GET STARTED
Black Enterprise Guide to InvestingJames A. Anderson(John Wiley & Sons Inc., $19.95)
The Wall Street Journal Guide to Understanding Money & InvestingKenneth M. Morris and Virginia B. Morris(Lightbulb Press, $16.95)
Investing in the Dream: Personal Wealth-Building Strategies for African Americans in Search of Financial FreedomJesse B. Brown(Hyperion Books, $22.95)
Coalition of Black Investors
Check out www.cobinvest.com, an organization geared toward African Americans that promotes saving and investing. The site also highlights black professionals looking to serve our community.
American Association of Individual Investors
At www.aaii.com, you’ll find information on investing in stock and mutual funds, and portfolio management.
Mutual Fund Education Alliance
Log on to www.mfea.com to find out everything you need to know about mutual funds. You can even set up a portfolio and monitor your favorite funds.