Çharismo said:
The title basically says it all. I've been reading and doing a little bit of research and most of all talking to a couple of people that have invested in the stock market. I'm not looking for short-term gains but rather long term. Buy & hold basically and yes I already know that if I'm looking to invest that much I have to be willing to lose it as well.
Anyone got and tips or advice they can share before I take the plunge??!
With Stocks you have two directional choices:
1.) You become the expert and manage your trades.
2.) You put your money into a mutual fund and allow someone else that's more of an expert than you manage your trades.
Now, in terms of actual strategies, if you are looking at buying and holding, you might as well get a decent mutual fund that's going to diversify that across Blue Chip Stocks, Growth Stocks, International Stocks, AAA/BBB Corporate Bonds, and Muni Bonds.
Me personally, I am not a Stock or Real Estate guy, I know that goes against all conventional investment gurus with Stocks and Real Estate usually being at the top of the preferred investments list.
I don't like them because their value is mainly tied to capital/asset appreciation, and that appreciation is pretty much out of my control.
I prefer to invest in Businesses and Bonds.
- Operating your own business, as long as you run it efficiently, is going to produce the HIGHEST amount of profits between any of the investment classes. I call it "investing in yourself". So you have $10,000 and let's say you create a business with that and turn that $10,000 investment into $40,000 in revenue within one year. That's a $30,000 profit or a 300% return. There is NO STOCK nor Real Estate property that will ever produce those returns.
- With Bonds you are loaning money to a Corporation, the Government or a Bank. I include Banks because I consider CDs as a form of a Bond because it all works the same way. You are going to loan the entity $10,000 for let's say 10 years and they are going to pay you let's say an interest rate of 2.5% on the low end, to about 10% on the high end, every year for the duration of the term. So let's say you have a Bond that's 5 years that will pay you 6% per year. You put your $10,000 in there and in 5 years at the 6% rate, your $10,000 is now worth $13,382. You can have the option to trade your Bond during the term, or you can decide to just HOLD it until maturity. You would seek to trade your Bond if you are holding one for 6% and there's similar Bonds on the market going for 9%. Using a Bond Ladder (where you buy different individual bonds with different maturity dates) allows you to take advantage of increasing Bond rates.
