There is a common misconception among African Americans that the stock market is too risky or is a rich man's game. "Playing" the market is seen as tantamount to gambling in a casino. Contrary to these beliefs, the United States stock market has allowed many to send their children to college, retire in a manor of their choosing, and significantly build their nest eggs. Over the long term, stocks have historically outperformed all other investments. Many go by the old saying "they are not making any more land", but stocks have historically even outperformed real estate.
The S&P 500® has been widely regarded as the best single gauge of the large cap U.S. equities market since the index was first published in 1957. The index includes 500 leading companies in top industries of the U.S. economy. From 1926 to 2008, the S&P 500 had an average annual return of 9.6 percent. As of December 11th 2009 the S&P 500 was up 25.38%.
The key is a properly diversified portfolio. As the old saying goes, don't put all your eggs in one basket. Diversification can reduce your risk without significantly reducing your return. If you do not have a large amount of money to put together an individual stock portfolio then, mutual funds (a professionally managed type of collective investment that pools money from many investors and invests typically in securities) or exchange-traded funds (ETFs) (an investment fund traded on stock exchanges) are acceptable alternatives.
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