For college graduates lucky enough to find work after they receive their diploma, the question as to whether or not they should invest and how they should do so is often a tricky one. With the market experiencing incredible high and lows in short periods of time, most young professionals are afraid to invest in stocks and are instead leaving their money in savings accounts.

Leaving money in a savings account is a great idea if you are saving up for a future large purchase such as a house or a car, but don’t underestimate how quickly you could be saving for retirement too. Keeping all your money in a savings account is very secure, but it also has incredibly low returns. Therefore, only emergency money and that being saved for a down payment or vacation should be kept in savings, as it allows you to have quick and easy access to the funds you need when you need it.

Otherwise, young investors should be looking towards stocks as they have their youth on their side.

Stocks offer the quickest and greatest returns which make them a great investment. However, because of their volatility, they are also not a wise investment for older investors who have a lot more to lose should their stocks not provide adequate returns. Because a younger investor has more time before retirement, they are able to more easily recover by further balancing their portfolio.

Because of the potential for great returns offered by stocks, young investors should not in any way, shape, or form be intimidated by them. In fact, most young investors should have approximately 70 to 75 percent of their savings in stocks and the other 25 to 30 percent in bonds. Not only will the right amount of diversity help them yield much higher returns, but it will also reduce the age at which they will retire. A good balance like the 70/ 30 ratio will also make investing a bit more stable and secure while still producing higher yielding results.

However, that doesn’t mean that young investors should just start blindly throwing money into the stock markets. There is a lot to learn about this topic, and taking tips from professionals like practiced professionals with a proven track record, like the Brian F. Prince Blog is a good place to start. While playing with small Forex markets or penny stocks can be a good investing lesson, those interested in establishing a firm financial future should contact a financial adviser to help them determine which stocks are worth investing in, as well as an appropriate amount of portfolio diversity.

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