Investing in stocks is probably one of the most talked about and widely used options for investing today. And no wonder! Stocks allow you to become the part owner of a company, and what better way to make money than to be part of something that creates value for people.

If you look at the forbes 100 list, most of the names up there are people who have succeeded in one sort of business or another. Stocks are simply a way for you to share in part of that adventure.

Risks Of Stocks
First, we should be clear up front that there is potential for great gain and great loss in stocks. Your expected profit tends to be directly proportional to the amount of risk that the particular investment entails. For example, savings accounts are extremely secure, but the return is very poor. Bonds are a bit higher on that ladder, giving you a fixed return even if things don’t work out so well. However, even if the company you invest in becomes the next google, you’ll still get your fixed return.

Stocks on the other hand, can make you a millionaire in the course of a year, or completely go bust. You get to share in the triumph – and failures of the company head on. It has the highest risk and the highest reward, so it’s not an investment for the fainthearted!

Time Period
Like all risks, the larger the sample size, the more likely you are to come out ahead in the long run. While you don’t get to control the stock movements from year to year, the longer the time frame, the more likely that you are to make money. For example, if you picked any 40 year period for stocks, it has always inevitably ended up higher, even while accounting for inflation!

That means the type of stock you choose for your portfolio depends on how long you think you’ll be around. If you’re near retirement age, then go for more conservative stocks like big companies. If you’re just in your 20s though, then you might want to invest in foreign stocks and small companies, since they’re the most likely to hit it big and you have a lot of time to weather the ups and downs.

Investing For The Long Run
No matter what you do though, keep in mind that you should invest for the long run. Many people have tried to day trade or time their stocks correctly to try to make money. While a few do get lucky, most people lose most of their money to trading fees.

If this really is something that you feel is right for you, be sure to check out some other stock investing tips around the web to get a good handle on things before you plunge in. After all, it’s a big decision!