There are so many rules associated with the stock market and investing. There is so much advice; everyone wants to tell you something. Everyone has something you ‘must’ do or you ‘must’ try. Everyone is right and everyone is wrong. There is no right or wrong way for everyone to invest, but there are some simple rules that no one follows. The most basic rule that is frequently ignored is this; you need to invest only in 3 index funds. You’re looking to invest long-term, not short. As recommended in Zacks stock picks, know the ratios before you do this; choose VEURX, VEIEX and VWELX or VTSMX and make sure that you’re doing in a 60-40 or 70-30 ratio – the bigger of the two always being a US stock and the smaller some sort of foreign stock. Doing this allows you to do a few things when you invest long-term. It allows you to keep your investments as comfortable for you as possible, and it’s a much safer and much simpler way of doing business. If you’re planning on entering into the stock market, forget the advice you are getting elsewhere and stick with this advice. It’s going to help you make wiser financial decisions that will pay off in the long run.
These solutions are not short-term financial solutions, but that’s not what this is about. This is not advice to make you short-term big bucks. Play the lottery for that. These very simple, very basic rules allow you to make financial decisions that will enable you to invest comfortably at all times and continue on the path of financial freedom. Take this advice and listen to it; it works. It’s basic, simple and its direct. You’ll need no other financial advice when it comes to investing if you keep this advice in mind. But if you think you still lack the knowledge to make the best investment decision, then it might be smart to take a look at that Kiana Danial price for a course that is ideal for you.
One of the biggest mistakes people make when investing their money in the stock market is trading and selling their stocks on a regular basis. The point of the stock market is to think long-term. This might not work for those who are already at retirement age, but for someone my age it’s the answer to all our investment questions. Never trade; do your research and choose the stocks that are going to hold their value and gain value over time. You are not looking for something that will go crazy overnight and make you rich in a matter of moments (not that there is anything wrong with that if you know how to make it work). What you’re looking to do is choose a stock that is stable and steady, that will grow with you over the course of your lives. You need to choose safely and stick with it. Doing so for a long time usually works out for the best, making people a lot more money than thinking short-term and selling and trading every time you get five minutes to do so. Pick something, stick with it and be patient. That’s what this game is all about, after all.
K.I.S.S. (Keep it Simple, Stupid)
Listen, we’re not calling you stupid – really. We’re just saying that this one is so simple that it bears that title for no other reason than to capture your attention. Also, if you’re not keeping it simple, you might be a little stupid. Warren Buffet prepares a simple paragraph to read off to this investment advisors when he is making a stock purchase, and he’s a billionaire. He simply jots down what he’s buying, how much he’s spending and why he’s buying it and he does not let anyone derail his train of thought. Another very wealthy and successful businessman by the name of Peter Lynch likes to set a timer and give his stock broker one minute to explain to him why he should go one way or another. If he cannot explain it to him, he will not buy it. It’s a simple concept, and it works in all aspects of life. Usually it is the simplest statements that make the biggest impacts, the simplest decisions that make the most difference.
The world of finance is only as complicated as you make it and if you want to invest, you need to keep it simple (so we don’t call you stupid).
Stick with Small Fees
There’s something about fees that’s just awful. No matter how small they are, they really do add up. So one thing you should do is make sure that you always keep your fees small so that you’re saving as much money as possible. It doesn’t matter how much you’re making if you’re throwing it away in fees. For example, would you choose to pay a $5 foreign ATM fee to use the bank on the side of the street you are already on or would you rather save the money and head across traffic to the bank that you already use? You can save $5 and take a little bit more time, but you will also have the added good luck of knowing that if you do this all the time, you’re saving big. Keep your fees in mind when you invest. It’s such a simple rule, yet no one ever listens to it. If you can avoid a few dollars on each fee anytime you do work with your stocks, you can save hundreds of dollars every year. It’s not brain surgery, you know.
Invest in Index Funds
They key here is to come up with an asset allocation that makes you comfortable. This is the key anywhere you go and with anything you do. You cannot invest in the stock market and plan for your financial future if you are not choosing the right funds and you are not comfortable with your asset allocation. Do not ever allow anyone to talk you into something that does not make you comfortable. Remember, at the end of the day these are still your funds, your money and your decision.
Photo by China Photos/Getty Images