![]() | |
![]() | |
![]() |
Investing Information |
|
![]() |
Find a Methodology and Minimize Investment Madness
There are many reasons to be investing these days, and too much opportunity to not have your money working for you. However, I believe the majority of people dread having to deal with investment matters, and tend to jump into purchases and then hold their breath hoping for the best. After a long day at work and taking care of the family, it's hard to get excited about reading up on your 401(k) options, Morningstar ratings and fund performances. If this sounds like you, there are basically 3 choices. You can have your investments professionally managed, you can continue as you have in the past & keep your fingers crossed, or you can find a methodology that objectifies the investing process (that's buying and selling investments) and helps you maximize your long-term results. To determine if you need help managing your investments(and this doesn't necessarily mean having to pay for advice) you might want to ask yourself these questions: => Do I really have the time and interest to follow the market closely on a daily basis? => Have I done well in the past managing my own investments? => Do I really want to add another layer of work and responsibility onto an already busy schedule? If you're like most people, you would answer yes to some and no to others, so how do you decide? If you think you could have or should have done better with your investments, then you need some help. Don't feel bad. Having counseled hundreds of people over the past 15 years I can honestly say that everybody needs some help, whether they are aware of it or not. Why? This could come as a surprise, but, in fact, your financial life is a lot shorter than your physical life? Most people who end up investing don't really start working and making money until they are about 25 years old. Considering the average retirement age of 65, this gives you only 40 years to save and invest wisely. If you make a poor investment decision, such as trying to stay fully invested during a bear market, you could lose big both in terms of diminished dollars and wasted time. To drive home this important point, let me give you an actual example involving my own portfolio. For ease of illustration I have adjusted the beginning portfolio balance to $10,000. During the period from 1/25/91 to 10/13/00 my $10,000 investment grew to $37,840, which is a 14.67% compounded annual return. On 10/13/00, based on a methodology I was following, I liquidated all of my domestic mutual fund positions and moved 100% to the safety of my money market account. Thanks to this move, my portfolio retained 100% of its value on that date. As we now know with hindsight, most people held on to their investment positions and have so far lost on average 50% to 60% of the value of their portfolios. For this example let us use 50%. If I had held onto my position, my portfolio would be down to $18,920. Last time I hit that level on the way up was in 1995. In other words, not only would I have lost 50% of my portfolio I would have lost even more by having used up 20% (8 years) of my total financial life. How can you avoid mistakes like that in the future? Spend a little of your valuable research time looking for investment methodologies that allow you to side-step bear markets and let you move back in during bull markets. In other words, invest your time looking at methodologies instead of investments themselves. This will lay the foundation for more effective use of your money and time. If you find a methodology that you like, and it matches your investment philosophy, stick with it for the long term. It should have the aspect of telling you when to get out of, as well as when to get into, an investment. I suggest you follow these broad guidelines:
If you take this advice, I guarantee that pretty soon sleepless nights will be a thing of the past and you'll be on your way to more confidently and successfully (that means profitably) managing your investments. About The Author Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped hundreds of people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit: http://www.successful-investment.com; ulli@successful-investment.com
MORE RESOURCES: Where Are Stocks, Bonds and Crypto Headed Next? Five Investors Look Into Crystal Ball The Wall Street Journal Nasdaq Bear Market: Cathie Wood Is Still Bullish on These 3 Beaten-Down Growth Stocks The Motley Fool Tax-Aware Investing: What Is It and How Do I Do It? | Chase Chase News & Stories Investing in Method Andreessen Horowitz Committee affirms anti-ESG, anti-China pension investing bills Indiana Capital Chronicle Investing When Your Time Horizon Is Short The New York Times Investing in Voldex Andreessen Horowitz The Best Stocks to Invest $20,000 in Right Now The Motley Fool A conservation legacy is possible by investing now Santa Fe New Mexican How ‘Permabears’ Make Money by Selling Fear Investing.com Investing Opportunities Emerge in Latin America Morgan Stanley Democratic lawmakers create sustainable investment caucus to ... Pensions & Investments What's Going on With REITs? An Investors Guide The Motley Fool How to Invest in Stocks - Buy Side from WSJ The Wall Street Journal Why You Should Invest: Top 10 Reasons AllBusiness.com 2 Dividend Stocks to Help You Beat the Market in 2023 Investing.com The 10 golden rules of investing Yahoo Finance Investing in Cygnvs Andreessen Horowitz Ultimate Guide on Investing for Beginners Entrepreneur Investing, thriving with automation - free webinar registration Today's Medical Developments The 5 Most Dangerous Times to Trade Investing.com Investing in PLAI Labs Andreessen Horowitz Investing $100,000 in These Stocks in 2023 Could Get You $1 ... The Motley Fool The Art of Contrarian Investing Investing.com Your Investment Lost Money Last Year. So Why the Big Tax Bill? The New York Times 80% of Warren Buffett's Portfolio Is Invested in These 7 Stocks The Motley Fool Investing in REITs vs. Direct Real Estate Morningstar Investing Action Plan — January Wrap: Apple, OPEC, Exxon And ... Investor's Business Daily Investing in 2023: A Year to Be Patient and Selective Morgan Stanley 5 Investing Alternatives for Conservative Investors Kiplinger's Personal Finance 8 Best Small-Cap Value Stocks to Buy | Investing | U.S. News U.S News & World Report Money Soft Landing Scenario: Possibility or Fed Myth? Investing.com Spend Your Time Working or Investing? » The Stacking Benjamins ... The Stacking Benjamins Podcast U.S. Warns Banks to Watch for Russian Oligarchs Investing in ... The Wall Street Journal 1 Smart Way to Invest Your Tax Refund You Haven't Thought Of The Motley Fool Rosie on the House: Investing in a whole home energy audit Arizona Daily Star Rewind 2022: My Investing Journey Seeking Alpha Gold: Bears Look Aggressive Before Fed Speaks Investing.com Gold Sentiment: Room for More Bulls Investing.com Is Intel's Downfall Good News for AMD and Nvidia Investors? The Motley Fool Personalized Investing Portfolios: Unlock the Greatest Potential Kiplinger's Personal Finance Long-Term Investments Require a New Approach Kiplinger's Personal Finance Calm Before the Rally? Investing.com Coffee Steaming Again After 4 Months in the Cold Investing.com 3 Reasons Investors Should Zoom In on GoPro Stock The Motley Fool The Week in Impact Investing: Integrity ImpactAlpha The First ETF Launched 30 Years Ago, Revolutionizing Investing The Wall Street Journal Would You Still Consider Investing in Amazon (AMZN)? Yahoo Finance |
![]() |
![]() |
![]() |
RELATED ARTICLES
Forex Trading Best Practices FOREX, the term for the FOReign EXchange market, is an international exchange market where currencies from many different countries are bought and sold. Both long-term hedge investors and short-term investors that seek quick profits use FOREX. Approaches to Investing Here is a small summary of the three major approaches to investing:1. Fundamental AnalysisTruly superior companies exist, are sometimes undervalued by markets, and can be identified by mostly financial research. It Is Never Too Early To Start A Roth IRA! The Roth is kind of weird until you get used to it in terms of how much you can put in (contribute) each year depending on how much you earn (compensation). Because of this you really have two limits, one dealing with your compensation and the other dealing with your contribution. Get Wealthy With the Rule of 72 When it comes time to retire how many people would like tohave a nest egg that is 2 or 3 or even 4 times larger thanwhat they have? With an answer so obvious allow me toexplain how you can make it happen for yourself.First we'll explain the Rule of 72. It's Never too Early to Start Investing! Remember the old saying, "never too late to start"? Well, try this on for size: when it comes to investing, it's never too early to start. Time really is of the essence here. Short Selling for Investors Shorts. Let's see. Powerful Hidden Techniques Mystery Formula - The Covered Call Option Trading Buy-Write Strategy For better or worse, most option trading investors purchase stocks with the intent of holding their shares for an extended period of time.We do this mainly because the media and industry professionals have drilled into our heads, year after year, time after time, that it’s best to buy and hold. Investing: The Art Of Making Your Money Work For You There is a lot to know about investing. It all depends onwhat type of investing you are interested in as well. When NOT to Invest Unfortunately, many investors who are seduced by the lure of easy money try to become "active" investors before they have the skills, the resources, or the appropriate intellectual framework to do so.This is not to say that investing in stocks is extraordinarily difficult . 5 Day Trading Tips for Success 1. How to Treat Gap Openings A gap up or gap down open is an emotional move, and it often will reverse course and turn in to "trap open". Value Investing By definition, value investing is the process of selecting stocks that trade for less than their intrinsic value. A value investor typically selects stocks with lower than average price-to-book or price-to-earning ratios. Global Markets: A Window on the World Economy Expectations drive the market. Every stock price is driven by what people expect the company to do. Reasons For Joining An Investment Club Whether you're a novice investor or an experienced stock picker an investment club may be beneficial to growing your investment portfolio. This article explains what an investment club is, why you should have an investment program and finally why you should join an investment club. Secret Stock Options Trading Strategies the Experts Don`t Want You to Know To understand stock options, we need to look at Webster’s Dictionary’s definition of the word strategy.Webster’s Dictionary defines the term strategy as1. How to Choose the Right Share Class You'll want to opt for the no-load or institutional share class instead. If you're a no-load investor who is determined to buy a fund that's primarily broker-sold, go through a supermarket and opt for the D shares. Creating a Financial Future - Putting Your Plan Into Action Part 1 This column has previously discussed "picturing the future that we desire", and outlining a plan to achieve it. We mentioned that the plan must include goal-setting, measurement, and implementation. Finding the Perfect Company The perfect company - it's the holy grail of the investment world. The company that will make its initial investment hundreds of times over. Oil and Gasoline Price Uncertainties The Light Crude Continuous Contract hit an all-time high at $70.85 a barrel, while Unleaded Gasoline Futures spiked 50% or $1 a gallon on Tuesday. Finding False Gold in Penny Stock As far as traders go, many do not see the penny stock as a solid way to do business. Many believe that dealing with penny stock is a risky business. Choosing A Financial Advisor With so many financial advisors trying to woo you with their qualifications and experience, how do find one you can trust your finances with? 'Trust' is the keyword here, as you will depend on him/her for your future financial security. A good financial advisor can help you determine which investments are best suited for you, based on your financial goals. ![]() |
home | site map |
© 2006 |