Investing in stocks right now is not such a hot topic, but neither is investing in anything else really. Most people are going with what is safe at the moment, and that leaves bank CD’s as well as money market accounts.

If you are planning on investing in a bank CD then there are several things that you should keep in mind. We will cover these things in today’s lesson. The first thing you should take note of is the penalties involved for any early withdrawal. Some banks can be very lenient, where as other banks can have some serious fines for those that are not careful to invest money that they do not need.

The next most important thing you should check is the term compared to the rate given. In most cases, if a term is short, then the CD rate is lower. But on some occasions, there will be a special at which point a bank will offer a higher rate than normal on a short term CD. This is a good time to invest.

There are also long term bank CD’s which can have a lot higher rate. This can be nice if you don’t mind waiting for a longer time to receive the interest earned on your investment. The down side is that during your long wait, rates can change. If rates change for the better then you really can’t do much otherwise you will be penalized to take the money out.

Whats the best answer then? Should you go short term or long term when opening a CD? Short term is actually the best option for several reasons. You can do what is called CD laddering. This means that you will continue to open up smaller term bank CD’s as specials come along. Your return over time will be very consistent, and thus you will be making the best overall investments over a period of years. This is also common with stock investments in a way but we will cover that another time.

Everyone is always looking for the best ways to invest their hard earned savings, to earn the maximum return for their money, with the least risk.

Alternative investors, however, often ignore the stock market, thinking they either don’t have enough money, or that the stock market is high risk, and therefore for experienced investors or brokers only. That’s not always the case, and if you are considering the stock market, here are a few helpful hints:

• Your investment amount can be as little as a few hundred dollars.
• Prepare yourself for the long haul. It’s been said, over and over again that the stock market is not really as high risk as most people think. However, it will take time, with ups and downs, for your investment to realise any significant return. So if you are going to invest, get ready to sit tight!
• Commodities are always “safe” people will always need the basics! They might not show huge increases quickly, but your investment will definitely grow over time.
• Pharmaceutical companies are another good option, as drugs are another item that consumers will always need.
• Look for companies that have low debt, healthy bank balances and good management. That, coupled with good long term prospects should make sure you have backed a winning horse!

Of course, at the moment, with the global recession worsening every day, consumers have very little disposable earnings left at the end of the month, if any. Those who do are choosing to invest themselves, or simply keep cash on hand to tide them over lean times to come.

For that reason, expensive electronics, luxury goods and other high cost gadgets, toys and tools are very low on everyone’s shopping list at the moment.

This has of course had an impact on those company’s stocks, with companies being hit by the double blow of decreased retail sales, and a lack of confidence, indicated by the drop in their stock prices.

What this means for you, the small investor is that stocks that you may ordinarily not be able to afford are now cheaper, and may be within your price range, however, it does require you to be able to correctly predict which companies will pull through the crisis!

Do you think that the U.S. dollar is as good as gold? Think again. The dollar has not been backed by gold since 1971 when Nixon shut the gold window and formally took the dollar off of the gold standard.

Why did he do it? Because the Federal Reserve was printing so much money that the value of the dollar was falling against the price of gold and foreign governments could redeem their dollars, which we were sending overseas, for gold.

The value of the dollar has dropped over 95% since 1913. That drop has accelerated in recent years due to the increase in the amount of currency in circulation. Want proof? Look at the price of gold and oil. With the price of oil hovering around $100 a barrel, we are assured of higher gas prices this spring and summer. And this week gold hit an all time high.

If you price oil in gold, you will find that oil currently costs the equivalent of 1/8 of an ounce of gold. Just about exactly what it cost in 2001. If the dollar is still as good as gold, oil would cost us around $30 a barrel, the same price that we paid in 2001.

And what about home prices? If we priced homes in gold instead of dollars, the American home would be cheaper today than five years ago. Same thing with medical costs, food costs, just about anything that you buy on a regular basis.

So, what is the point of all of this? It is simply this. The U.S. dollar is pretend money. It is kind of like Monopoly money, once the game is over, neither have any value.

Only real money holds its value. With real money, you can purchase real things at real prices, not inflated prices. Gold happens to be an example of real money. It has intrinsic value, not implied value. That means that no matter what governments do, gold still has value.

Gold also does a good job of telling us the health of the U.S. dollar or any other currency and right now the dollar is sick, very sick.

What can we as investors do to protect our assets in light of the dollar’s health problems? We can make sure that our investments are properly diversified. By diversified I mean invested in non-correlated assets. Instead of investing in regular mutual funds which have high expense costs and limited investment options, you might consider Exchange Traded Funds (ETFs).

ETFs offer you the ability to invest in natural resources, precious metals, energy, foreign currencies, and just about any market sector that you can think of and they have very low expense ratios. They are a great way to properly diversify your investments.