Stock Market Investing Strategy – What Approach is Right For You?
The younger you are the better the time to start investing in stocks. That is not to say you cannot start anytime, but if you were successful when younger, the amount you would have earned would be much greater than starting out later in life. Probably the best place to start investing is through your job and a 401k. Some companies still match dollar for dollar in your investment in the 401k retirement fund. Always put in what your company is matching, it is free money. Matching means that if the company will put in $ 400 dollars a week into your 401k, you should not put in less. The 401k invests primarily in mutual funds, a basket of stocks in many sectors that spread the risk around.Â
The stock market generally goes up over the years. You do not think the big players would put money into something that will go down. If you have some extra funds you can diversify by purchasing gold or silver. This can be in the form of gold or silver bullion. Bullion means the price of the gold or silver is strictly based on its fineness or purity and its weight, according to market conditions. Many 401k funds will accept gold bullion into its portfolio for you. You might be wise to buy some gold or silver bullion coins and keep them in your home to hedge against a national emergency or something catastrophic. If that occurred your dollars would be worthless and you could use your coins to survive until things improved. A tank of gas or a loaf of bread might tide you over.Â
As you become more sophisticated in your investing and have educated yourself, you can invest privately in addition to your 401k or IRA, if you are self-employed. Remember that every purchase or sale will cost you a commission. You can start purchasing stocks of companies you believe will be successful after studying their economic reports. Choose a few across sectors. You would not want to buy only clothing stocks or only energy stocks, otherwise you are not spreading the risk. Dollar cost averaging is the way to go. You put the same amount of money into the stock, e.g. weekly and your purchases are made whether the stock is going up or down, hence dollar cost averaging. Have all the dividends (earnings) distributed to you put back into the company so as to earn more money.
This is a conservative strategy. There are more bold strategies like investing in foreign stocks and hedge funds, but that is primarily for experienced investors. As you become knowledgeable you will make a bit riskier investments which will bring you more profit.
If you’re looking to start investing, you’re reading the right article. If you want to learn more, why not find out more about the best stocks to buy and other great investing tips.