VIDEO ON MSN MONEY
Good basic investing advice. Especially, “Do: Maintain cash savings”
I’ve always adhered to a policy of keeping two years of living expenses in cash reserve before even thinking about investing in stocks, bonds, or other investments (yes even bonds are risky these days). I know it sounds extreme to some, but, this practice saved my a$$ and my portfolio more than once over the last 25 years. And, with extended job loss and other financial threats now a constant in our brave new world, I recommend it more than ever.
Don't pay attention to any "Stock Market Analysis" found on MSN..
You do not need to be very smart or have a computer and lightening fast algorithms to invest successfully. What you need is common sense, a little basic knowledge of the time value of money, P/E and debt ratios and a willingness to read. Do not try to evaluate an annual statement of a company if you are not trained, I have an MBA and do not consider myself qualified. Read what the professionals say. There are many unbiased sources. Take the information you get from the pros and apply your own common sense. Have an advisor to bounce ideas off, but in the end go with your opinion. Be patient, diversify, have a strategy. ( My strategy is to maximize current dividends while minimizing capital losses. I do not care if a stock goes up if it pays a good current return. I worry a lot about what the pros call value traps and get out of any investments I do not see as having stable earnings.)
Never buy what the pros call momentum plays, in my book they rely on the greater fool theory and if you do not get out at the right time you can get killed. Examples of this include Crocks, Amazon and most new bio-pharma. Never buy on the basis of fear of missing out and never sell on fear. Be patient!
But since they are overwhelmingly biased toward short term investing and full of sensationalism to buy and sell, they more often point you in the WRONG direction - including msn.
Get yourself a good book on investing, whether it's mutual funds, ETFs, stocks or bonds. For stocks, two easy to follow books for value investing are Mary Buffett's "Buffettology" and Peter Lynch's "One Up On Wall Street." They will point you toward steady growth stocks at reasonable prices that are likely to make money for you. Using that philosophy I gained 36% last year compared to the market's 32% (including dividends) and this year so far 1.32% compared to 0.96%.
I generally do 10%-20% better than the market most years by sticking with sector-gorillas with steady growth, low debt, good return on equity, durable competitive advantages, at reasonable prices as per Buffettology, OUOWS, Philip Fisher's "Common Stocks and Uncommon Profits," Ben Graham's "The Intelligent Investor," Lita Epsteins, "Reading Financial Reports for Dummies," etc. The time studying such books pays off.
As the most famous and well-respected investor of all, Warren Buffett, wrote in this year's letter to Berkshire Hathaway (BRK.A) shareholders, "The goal of the nonprofessional should not be to pick winners -- neither he nor his 'helpers' can do that"
First of all, who in Hades are you to tell others what they can or can't do. Just because you or I can't do something hardly means someone else can't do it. Don't put your limitations onto others. As far as Warren is concerned, he is no different then any other Major investor, they need as many folks in to get the biggest Bang for their Bucks. So Warren is just protecting his positions. Also, Buffett get special investment deals that's not available to 99% of other investors. Those deals are severely rigged in his favor. Buffett also has a backdoor to great arrangements via the FED, also something 99% of everyone can't do.
We are literally in uncharted territory on nearly every Economic Front. We have epic Pollution on a Global Scale. WE have engaged in unchecked GMO Food production. Global Debt has soared 40% since the Great Recession while we have done little to solve the issue of stolen Funds from Social Security and the Medicare Trust Funds. So as the Corrupt Money Changers sit there and preach Patience, time is Literally running out before the Chickens come home to Roost. You can't continually Rob Peter to pay Paul and NOT pay a Major Price. The givebacks in Stock Gains will be Epic. And it might not ever recover.
Shame investors can't do what BoA did 5 years ago.
As a mutual funds trading portal, BoA employees would take all the trades that were losers after the 4:00PM cut off time and correct them to show a gain with the time posted on the trade back dated to 4:00PM or earlier.
That's the true way to avoid losing money!
PS- I like the BoA employee that gave my post thumbs down. Classic!
Looking at the picture of the woman you could just as easily substitute her stock analysis sheets for a horse racing handicap analysis sheet. The results are about the same.
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