4 TIPS : INVESTMENT TECHNIQUES THAT BEGINNERS KNOW .

BASIC INVESTMENT TECHNOLOGY



4 TIPS : INVESTMENT TECHNIQUES THAT BEGINNERS KNOW .
4 TIPS : INVESTMENT TECHNIQUES THAT BEGINNERS KNOW . 



The hardest part of anyone who has ever considered an investment or knows that it is an investment is probably the first few steps.


The investment world is full of threatening strategies and nuances on a new dictionary of language you probably do not know.

Often you feel like you can never catch up with people who are "doing really well" in managing and maximiSing your money, or you may feel like making one mistake to erase all your progress.
But there are simple things everyone can learn.


 Let me tell you a few basic skills and let me start an important job of dismantling the money world.


It takes time, effort, and discipline to be a successful investor, but keeping in mind these four basic investment techniques will help all investors make a good start.


COST AVERAGING



It is almost impossible for professionals to consistently align the timing of the stock market. I do not care what they say.

There is a risk that the market will fall immediately after the investment, and the value of the portfolio can drop significantly in large batches.

To avoid the risk of real demand, investors should consider averaging dollar costs instead.
It is a technology that regularly invests a certain amount of money over a long period of time.


After accumulating savings, invest a fixed amount of money rather than swapping a part of your brokerage account every six months to buy new stocks.


During the same six months, we provided information on each payoff for the stock.
When the fixed price is low, you buy more stock, and when the price is high, you buy less and you can lower the average cost per week.


Of course, if stock prices continued to climb higher and higher over that period, you would have been better off investing your first pocket money.


But later, we could see, and in the meantime, we could limit the risk of disadvantages by calculating the dollar cost average.


If all this sounds familiar, you probably already use this technology for the 401 (k) contribution.
In the example above, I mentioned the stock, but the stock purchase fees often make the average dollar cost too expensive.


Instead, use this technology to buy funds. Both ETRADE and TD Ameritrade provide an account with no commission ETF transaction.


REINVESTMENT OF DIVIDENDS



Whenever people cite the long-term average return on the stock market, it's likely to talk about returns, assuming the total return, that is, all dividends reinvested.


Like compound interest, dividend reinvestment is a powerful financial notion that allows profits and additional dividends to the original investment as well as dividends received on the way.


However, you do not have to use dividends on stocks to buy more shares.

If possible, however, they are tempted to withdraw quarterly cash dividends and instead put them back into the investment portfolio.

Some online brokers can even reinvest dividends for free, instead of paying commissions as in other regular trading activities.

With Scotrade's flexible reinvestment program (or FRIP), you can purchase one or more shares or funds with a certain percentage of dividends and no commissions.

This is basically an automated dollar averaging for dividends and is a way to avoid commissions that can make it too expensive to buy a small amount of one or more individual shares.


LONG-TERM INVESTMENT



Warren Buffett, a huge proponent of long-term investment and a source of financial wisdom, advises, "If the market is closed for 10 years, you have to buy something that you can have."


Not just because you think the stock price is going to rise in the short term, but also because of the strong fundamentals and strong long-term outlook.


Market and individual stocks fluctuate over time, but with long-term focus, we invest in quality companies with consistent performance and experienced management.


In general, you should avoid timing or short-term fluctuations in the market, but when other people with short-term investment horizons discard their stocks and temporarily fail to perform, you always need to invest in investment accounts Keep cash reserves.

DIVERSIFICATION OF INVESTMENT



I know. Diversification is not "technology". And by now you've heard about how important it is to not forget these fundamental concepts.


However, creating a diverse portfolio is theoretically a lot easier than it really is, so it is essential to develop a strong perception of risk from scratch.


Those few who thought diversification meant simply "owning a diverse stock" would be ready to avoid the chances of catching investors.


This is what many people think when they hear this phrase.
You need to think more deeply about what your company has in common with the products and services your company offers.


For example, as the US economy continues to recover, construction companies may choose to own caterpillar stocks because they expect to invest in new equipment .


YUM! Because I think that the increase of the discretionary income can gain the profit of the fast food again.

You can also choose to own a stock of brands (Taco Bell, KFC, owner of Pizza Hut).
It is cheap enough to provide stability through another recession.

But each has a very different business model, but both have something in common.

It is China. China's economic slowdown has been a factor in recent earnings deterioration and downward revision of the two companies, and if the sales of both companies do not improve in this region, they will continue to struggle.


Conversely, owning an auto parts retailer such as Ford or Autozon could mean that the automotive industry is doubling.


But in times of recession, consumers may delay major purchases like new cars, and Ford's performance degradation may offset some of the drivers who need to purchase replacement parts in Otozon to extend the life of older vehicles.


Given the companies you are investing in the context of the relationship and the economy they are performing, it means you are moving from "choosing a variety of things" to "coordinating and thoughtful planning".


Investments are not as complex or scary as they seem, but they need to be patient with patience and a few simple concepts in order to make better decisions with less short-term satisfaction.


But learning how to explore your investment in a thoughtful way makes you a smarter, more insightful person and makes you more familiar with the financial world around you.



Betting in the future can be a threat, but we all have to live ther'e someday.

It is better to prepare.



thanks for the time .

Post a Comment

0 Comments