Posts Tagged ‘Investing’
Tax season is here and most US citizens are seeing the April 15 deadline looming before them. It’s a good time to talk about where income is coming from and, in particular, what your overall investment strategy is. Let’s review a few options.
Stuffing Your Money In A Matress used to be sort of a joke, but given the performance of the market since June 2008, most people who had their money in 401K’s and mutual funds would have been better off with money in the matress. This still isn’t much of an option, though, because it makes your matress too lumpy.
Bank Accounts are an incredibly bad alternative because of the low interest rates. Of course, checking accounts are the worst, but even money market accounts and CDs show horrible performance.
Mutual Funds have historically done better than bank accounts. They typically return under 20% ROI per year when following a “buy and hold” strategy, although that is really the worst strategy to follow (the big brokers seem to love not making you money). A better strategy of buying and selling at historically strategic times in the year can dramatically increase that rate.
Personal Trading can improve that rate of return, but frankly, you’ve got to know what you’re doing to make any money. Despite the commercials with the baby making the trades, it takes serious knowledge to make any money placing your own trades in the market… and that doesn’t even talk about short sells, options, margins, and any of the other vehicles available to traders in the know.
An extremely interesting alternative is Private Investment Clubs. There is an entirely different investment world availalbe to people with serious money to invest… like five million dollars or more. They are able to see returns in excess of 10% per month including in this recently falling market. Yes 10% PER MONTH! So, what do you do if you don’t have those big bucks to invest. That’s where private investment clubs come in. They pool the money from hundreds of investors in order to look like one investor with lots of cash.
This month’s Enjoy A Better World newsletter, coming out in mid April, will feature an article about Private investment clubs. It is sent by email to people who become subscribers to this site. Just fill in the short information at the right.
Day Trading has sort of a tarnished name. I guess it wasn’t helped much by the guy who went to the offices of his day traders, flipped out and started a shooting spree. But what is the real alternative? A look at the chart below shows that the market took a serious nose dive between June and December, and then pretty much flattened out after December. The purple line is the 40 day moving average and it shows these general trends. The fact is anyone who simply invests in a stock and holds on to it really would have difficulty showing any kind of profit during these times. On the other hand, look at the black line. It’s up and down and up and down. That means that on any given day there are profits to be made… and that’s where Day Trading comes in. more on day trading>>>
This is a good time to look at your entire relationship with the market. It doesn’t matter whether you trade stocks, options, commodities, or even Forex. It’s a good time for a little self reflection. First, ask yourself why you trade in the first place. Why do you use the strategy you use? Maybe your strategy is to hand your money to a major broker like Smith Barney, AG Edwards, Fidelity, or any of the others. Does that mean that your main strategy is to not deal with investing… to just give your money to someone else and let them hopefully make money for you. more about A Guide for Good Investment>>>>








