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The stock market reacted poorly on Monday morning to the Standard & Poor’s announcement that it had downgraded the United States credit rating. The rating agency announced late on Friday that it had dropped the U.S. rating to AA+, which marks the first time in history the world’s largest economy was not a member of the coveted AAA club.

Investors React to Credit Rating Downgrade

The Dow Jones industrial average took a huge 512-point dive in the stock market on Thursday, making this the largest drop the index has taken since the financial crisis in 2008. Officials say the drop largely represented investors’ fears of problems plaguing the global economy, especially in Europe.

Stock Market Drops Erase All Gains for the Year

As an investor, risk can be a good thing. After all, you have to take risks to see big rewards. However, high risk investments aren’t always worth the chance, and there is definitely a way to take unnecessary or dangerous risks that will almost certainly end in a loss. The following are some of the riskiest stock investments available today that you’re better off avoiding completely.

Penny Stocks

Regardless of how much money you have in the bank, diversifying your portfolio is always a wise idea in order to avoid putting all your eggs in one basket. The variety of products and choices available can seem overwhelming to the novice investor, but learning the differences between them can aid you in making educated financial decisions.

If you are interested in taking your savings to a new level, knowing how managed funds differ from individual stocks is a crucial piece of information.

The recession may be officially over, but Americans are still hurting financially. The Department of Labor reports hiring was down last month, and the disappointing news had a ripple effect on the economy as the stock market fell this week. The good news is it’s national doughnut day, and who doesn’t love doughnuts?

Sony Gets Hacked…Again

Are you a go-getter who doesn’t let anything get in your way? If you answered yes, chances are you don’t want to leave the task of overseeing your managed funds to a stranger and plan on grabbing the bull by the horns. If you want to be successful at managing your own portfolio, there are certain things you need to consider before beginning the investment process.

• Understand the Risks: Managed funds are a great way for investors to easily diversify their portfolio. However, unlike some other types of investments, managed funds do not guarantee a positive return and the principal balance can actually depreciate if the managed fund loses value after your initial purchase. Additionally, there is no FDIC insurance coverage for managed funds.
• Know Your Goals: Are you looking to make a quick buck or plan on investing to meet long-term goals? As long as you can commit to a longer-term investment period, you may increase your odds of being successful in managed funds.
• Read All About It: If you are purchasing funds yourself, or even if you plan on hiring a financial professional, you need to know as much information as possible. Investment companies produce collateral material called a “prospectus” for all their securities, which details required disclosures, general terms and past performance. Understand, however, past performance is only an indicator of how a fund may do in the future and not a guarantee.
• Think Big: Managed fund options are plentiful. However, play it safe as you start out by mostly investing in bigger, well-established funds with good reputations to help you ease into the game. You can get an idea of where to start by asking trusted colleagues, friends and family about their investments and take it from there.

Earning more money is something that makes everyone happy, but that happiness is short-lived for some when they realize they have to pay taxes on that extra income. Those interested in minimizing fund taxes may consider investing in a tax-managed fund.

These investments were created by investment firms as a response to the number of investor complaints regarding capital gains taxes. When investors balked at having to pay extra taxes for gains they earned on successful investments, some firms began offering tax-managed mutual funds. These types of managed funds are meant to balance the amount of an investor’s taxes because the fund managers do the following:

The stock market and oil prices have both made noted adjustments following news that Osama bin Laden was killed by U.S. forces on Sunday night. Investors, reacting favorably to the news issued by President Barack Obama, responded with a reasonable increase in shares and noted slip in crude prices.

Bin Laden’s Death Prompts Stock Reactions

The Dow Jones Industrial average jumped 0.5 percent at the end of the day on Thursday, helping it reach the highest level in nearly three years. While the gains proved to be impressive, some say they were muted a bit due to disappointing readings in manufacturing and labor.

The Dow Jumps 52 Points

Thursday was a good day for the Dow as it surged 52 points to end at 12,505.99, a high not seen since June 2008. Gains were said to be led mostly by a nearly 4-percent surge in shares of Travelers, along with an average 2-percent jump in both IBM and Alcoa.

Fears of a major U.S. stock sell-off were confirmed on Tuesday after Japan’s Nikkei index ended down nearly 11 percent. The risk of radioactive material leaking at the Fukushima Daiichi nuclear power plant leaves many investors fearful of a nuclear crisis after an 8.9-magnitude earthquake caused significant damage to the plant and resulted in explosions on Saturday.

Japan’s Nikkei Index Dropped as Low as 14 Percent