Investment Matrix - EARN 
The Money or Investment Matrix will primarily be for the Grand Masters in the Game. It is best to have all your expenses covered before you venture into this area. The “Prudent Man Rule” will be followed when recommending any investment or savings vehicle in this Matrix. Only after the Grand Master has attained a certain level of success will unnecessary risks be advised. We’ll try to promote real professionals into the system to mentor the new Players and IMRs about their investment strategies both inside and outside the Plizzel Game.
Some good advice from the Pros!
Many investors are looking for hot stock tips. You’re going to get one today. It’s about perception.
The big mistake most new investors make is they view the stock market as a kind of casino slot machine: invest a chunk of change and you might hit the jackpot — or you could wind up losing your whole cup of coins. They think that if you invest in the stock market, you’ll either win big or go home with your head in your hands.
With an all or nothing perspective like that, is it any wonder why so many American’s put off investing in stocks, or never invest in them at all? Talk about stressful.
Veteran investors, on the other hand, don’t tend to see the stock market as a make-or-break proposition. The people who are truly successful in the stock market see investing as something akin to fishing. No kidding. You know how it is, if you have the right bait, choose your fishing spot carefully, keep a close eye on the water and don’t get frustrated even when nothing’s biting, your chances of pulling in some fish are pretty good — much better than if you spent the whole day motoring around looking for the perfect fishing hole.
It’s the same for savvy stock investors. They usually aren’t out to hit it big. Over the years, they’ve learned that consistency is the real key to success. They contribute a small portion of their savings on a regular basis, choose their stock investments carefully and stay invested no matter whether the market is up or down.
So here’s your stock tip: think like a fisherman. Sure, this approach may not be as exciting as playing the slots, but your chances of coming home with a decent haul and a big smile are much better.
Okay, enough of the lecturing. Let’s talk about exactly how you can get started in the stock market. We’ll introduce you to some of the important principles in this first lesson, then show you how to manage them in the lessons that follow.
"Does this thing come with a guarantee?"
The first thing you need to know about investing is this: whenever you invest, whether in stocks, bonds, or even if you simply keep your dollars in a money market fund, there is no guarantee you’ll make a profit. With some investments, you could even lose money, ending up with less than you started with. Armed with the right knowledge, however, you can improve your odds of success, balancing the risks of investing with the potential rewards.
The cookie jar option — that’s risky, too
Whenever you invest, you expose your money to some level of risk. You might not think about it much, but there is risk involved no matter what you do with your money. Even stashing your life savings in a cookie jar or under a mattress comes with the risk that your money could be stolen or destroyed.
Investing in the stock market carries its own risks. A stock you purchase might fluctuate up or down in price. Stocks are volatile by their very nature (some more than others), and that’s part of the inherent risk of this type of investment. In the worst case, a stock could become worthless and cause you to lose 100 percent of your investment. You can never eliminate the risk associated with investing in stocks, but you can certainly tame it — and even put some of those volatile tendencies to work for your benefit. We’ll show you how in future lessons.
Rising above inflation
There is another important kind of risk to consider, even if you’re investing in bonds or just keeping your money in the bank. There’s the risk that your investment won’t grow fast enough to keep up with the effects of inflation. Over the years, inflation has grown at about three to four percent per year on average. If your money is sitting in a bank collecting interest at less than the rate of inflation, then that money will actually be worth less when you withdraw it at some point down the road.
Assuming a reasonable amount of risk
Whenever you seek higher returns, you must accept higher risk. The key is to balance the amount of risk appropriate for your circumstances (what experts call your "risk tolerance") with the amount of reward you want to achieve. Every person has a different tolerance for risk, and it’s up to you to decide for yourself how to build a portfolio that will serve you best (We’ll be providing tips in future lessons).
Historically, investing in stocks has offered the chance to earn higher returns than investing in bonds or keeping your money in the bank. But that opportunity comes with higher risk. The essence of successful investing is understanding and accepting the fact that risk is unavoidable — and managing that risk so you can still sleep well at night.
Dollar-cost averaging: a sound investment strategy
There are, of course, lots of investment strategies. But if you like the idea of investing a little at a time, consider the "dollar-cost averaging" approach. It may sound complicated, but it’s actually one of the simplest long-term investment strategies. With dollar-cost averaging, you automatically invest a fixed amount each week or month in the purchase of a security or group of securities.
The convenience and ease of dollar-cost averaging makes it attractive to busy people. But it’s also a really sound way to invest your hard-earned savings.
In fact, you might be using the dollar-cost averaging approach to investing right now without even realizing it. If you invest in a 401(k) or other retirement plan at work, you contribute a fixed amount each pay period to your account, which is then used to buy shares in one or more mutual funds. Over time, your regular purchases may reduce the average cost you pay for all your shares — and that can help increase your returns.
When you make a weekly or monthly purchase with a dollar-cost averaging program, the price of the stock may be higher or lower than it was the month before. If you invest $100 a month, for example, then your $100 will buy fewer shares when the price is high and more shares when the price is low — automatically. While dollar-cost averaging does not assure a profit, over time the average cost of your shares will generally tend to be lower than if you had made a single one-time investment of the same amount.
Of course, you should recognize that dollar-cost averaging doesn’t protect you from investment losses. And you should consider your financial ability to continue investing in a declining market. A stock can actually decline until it’s worthless — so don’t count on dollar-cost averaging to protect you from the damage caused by buying a bad stock.
"Automatic Investing" at ShareBuilder (there’s a big difference) ShareBuilder’s automatic investment program makes it really easy to regularly invest a little of your savings in the stock market. Traditional stock brokerages may offer something similar, but ShareBuilder’s program offers a significant advantage. At ShareBuilder, you can buy stocks in dollar amounts – which allows you to invest a fixed amount no matter what the fluctuation in the price of your chosen securities.
When you buy stocks at a typical brokerage, you can only buy whole shares. That means if your chosen stock currently sells for $70 a share, for example, and you have $200 to invest each month, then you can only buy two shares for $140 (plus commissions) that month. The remaining $60 has to sit on the sidelines until the next month (which means it can’t be working for you in your portfolio).
Here’s another example: say you have $50 a month to invest at a typical brokerage, but the stock you’ve selected currently sells for $85 a share. You either have to wait until you can scrape together the remaining $35 (and hope the price doesn’t go higher), or you have to find another stock.
That’s not the case at ShareBuilder. When you utilize the Automatic Investment Plan at ShareBuilder, you purchase fractional shares with the entire amount of your investment dollars. Your $200 will buy you 2.857 shares of a $70 stock (not including transaction charges), for example. Or your $50 will buy you 0.588 shares of a $85 stock. This way, you don’t have to put off investing until tomorrow.
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