| Investment in stocks is considered risky. This is | | | | Number (ITIN) is a tax processing number issued |
| the reason why every stock brokerage firm, | | | | by the Internal Revenue Service. IRS issues ITIN |
| Investment Company or an Initial Public Offering | | | | to individuals who are required to have a U.S. |
| carries a disclaimer and warning about the risks of | | | | taxpayer identification number but who do not |
| investments in stocks. | | | | have, and are not eligible to obtain a Social |
| Despite the most scientific and historical analysis, a | | | | Security Number (SSN) from the Social Security |
| stock may surprise you with its sudden | | | | Administration (SSA). |
| unexpected vivacities and tantrums. This is why | | | | ITIN are issued regardless of immigration status |
| you have to invest even in 'hot' stocks with | | | | because both resident and non-resident aliens may |
| utmost caution. Sometimes they turn out to be | | | | have U.S. tax return and payment responsibilities |
| like hot potatoes. High expectations are invariably | | | | under the Internal Revenue Code. Individuals must |
| accompanied by high risks of losses. | | | | have a filing requirement and file a valid federal |
| The best policy in stock investing is to take an | | | | income tax return to receive an ITIN, unless they |
| intermediate course. There are certain stock | | | | meet an exception." |
| investment options which deliver assured and | | | | The third stock investment option is to go for |
| consistent high returns over the long term and | | | | Index ETFs or Exchange Traded Funds. ETFs are |
| allow you to sleep peacefully too. | | | | funds that track an index but cannot be traded |
| Moreover, you need not invest huge amounts in | | | | like a stock. An index represents the relative |
| stock trading and create deep holes in your | | | | value of a market by following a representative |
| pocket in the event of loss. Some brokerages | | | | folio of stocks. For example, the NASDAQ-100 |
| offer scheduled investment plans. These are | | | | index is the combination of 100 biggest |
| customizable investment plans. You do not have | | | | non-financial stocks in the NASDAQ market and |
| to stretch your financial resources to a breaking | | | | the S&P 500 represents 500 different |
| point in order to invest in such plans. You can | | | | stocks across all markets. ETFs are ideal |
| invest according to your budget and build a | | | | investment options over the long term since they |
| portfolio over time and make substantial savings | | | | are automatically diversified. Diversification means |
| for your future. The scheduled investment plans | | | | spreading your funds across different |
| allow you to create a custom portfolio of stocks | | | | investments. In other words you do not have to |
| by specifying an amount that you can | | | | put all your eggs in one basket. This way if one |
| conveniently invest. | | | | investment shows poor results, it will not show |
| You can schedule your account to automatically | | | | substantial effect on the over all performance of |
| buy these stocks on a one-time or recurring | | | | your portfolio. Diversification is a surer way to |
| basis, whether daily, weekly or monthly. Scheduled | | | | reduce risks. Moreover, buying the ETFs costs |
| investments can be easily combined with | | | | very little if you open your account with the right |
| scheduled electronic transfers to make saving and | | | | stock broker. |
| investing nearly automatic. You can choose one of | | | | By purchasing the same dollar amounts of index |
| the several investment plans with the help of | | | | ETFs, you can automatically track the |
| your broker. You can set up automated fund | | | | performance of the index that the ETF tracks. |
| transfers from your bank account and let your | | | | This automatically enables you to obtain the same |
| broker know what to buy. | | | | return as that index. It must be noted that the |
| The second secure investment option is to open | | | | S&P 500 index has historically returned |
| an Individual Retirement Account. IRA is a | | | | around 10% returns every year. Your investment |
| personal retirement plan that offers tax | | | | is compounded automatically which means that |
| advantages to investors. It allows the investors to | | | | regular investments, howsoever small they may |
| deposit a portion of their income into tax | | | | be, can grow into very sizeable amount over the |
| deferred brokerage account. Your contributions | | | | long term with compounding effect. It must be |
| may also be tax-deductible. | | | | noted that the interest you earn is reinvested |
| You must, however, have an Individual Taxpayer | | | | which, in turn, generates its own interest. You |
| Identification Number (ITIN) to avail of tax | | | | enjoy much greater potential gains over a long |
| benefits. "An Individual Taxpayer Identification | | | | time. |