 TITLE: What to Consider Before Investing in Stocks CONTENT: When Is It a Good Idea to Invest in Stocks?\n-------------------------------------------\nThe right decision about whether it's a good idea to buy individual stocks depends on your financial situation. Because of the volatility of the the stock market, there are some things you'll want to take care of before you start investing:\n*   **Emergency savings**: If the market experiences a downturn and your portfolio loses a significant of its value, you can't get that money back, at least not immediately. As such, it's a good idea to have a robust emergency fund before you start investing, just in case the downturn coincides with a financial emergency, such as a job loss.\n*   **Budget**: Managing your expenses well is a key element in any successful financial plan. As long as you have a budget in place and you're spending less than you earn, you may be able to use some of the remaining funds to invest in the market.\n*   **Debt**: There's nothing wrong with investing while you have debt. But if you have high-interest credit card debt, you'll be better off paying that down first. This is because credit cards typically charge higher interest rates than the value of the average return you can get in the stock market.\n*   **Long-term savings**: Investing in individual stocks at the expense of your retirement may come back to haunt you. Retirement savings accounts offer tax advantages you can't get with a traditional brokerage account, and neglecting your long-term savings can put you in a position later in life where you have to save more to catch up.\nStock market basics tell you it's always a good idea to buy low and sell high. If the economy is in a recession there may be more market volatility than usual, which can present opportunity, but chances for a large return are higher than when the market is doing well.\nIf you do plan to invest, consider the buy-and-hold strategy. It may be tempting to trade stocks regularly to try to capture big short-term gains. But as a so-called retail investor, fees and other factors put you at a disadvantage compared with investment banking firms, and you could end up losing money if you're always chasing the next big thing.\nIf you buy and hold a stock, you'll still be subject to short-term fluctuations in its price, but the likelihood of the value going up in the long run may be higher. END