How to Know Whether That Investment Is Worth It

Nobody knows what the stock market is going to do. In fact, there's a strong argument to be made that we never have. But that doesn't mean we can't use data to make informed guesses. Luckily for those of us who aren't investment whizzes, we have tools at our disposal to help us out.

CNN Money's Walter Updegrave took a reader question this week from a potential investor who's anxious about the Wall Street rollercoaster. Huge numbers of American consumers are warehousing their money by keeping it in checking accounts rather than investing it, and that could spell trouble for the economy. Updegrave gives the reader a solid set of advice: Diversify your holdings and try to plan rather than speculate.

It's one thing to know that you've got huge amounts of data available about stocks and bonds; it's quite another to know how to look at it all. Updegrave recommends one slightly old-school online product to figure out how your preferred portfolio breaks down. It's called the Instant X-Ray tool, from investment management site Morningstar. You can sign up for free, with a Premium account on offer with a 14-day free trial. Tell the Instant X-Ray which stock, fund, or bond you want to investigate, and it will tell you useful analytics like asset class, market sector, and investing style.

A lot of what you choose relies on your tolerance for risk. Luckily, there's a quiz available for that. Once you're able to figure out what works for you (and it's never a bad idea to talk with a professional, just to be sure), sticking it out through a turbulent market will be easier than you think.