This is part three of the series How to Invest In Stocks.
Want to investing on your own? Then remember to plan, plan, plan and research, research, research. Success always increases when planning increases. That’s why we call it “financial planning.”
Even the ancient war strategist Sun Tzu wrote in The Art of War:
“The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand.”
This is just the beginning. Subscribe so you can see the full, in-depth explanations of these styles of investing. Chances are, this will be one of the few (or last) time you will ever read about cone investing — some ideas are too politically incorrect to become popular.
This article will explain the 4 most powerful investing strategies. There are obviously thousands upon thousands of tactics, but in the end, these four strategies are the main focuses of investors and financial managers.
The Importance of a Strategy
If you don’t have a plan for investing, you’ll lose your shirt. Pure and simple, investing without a strategy is simply rolling dice and betting the farm — it’s nothing more than a gamble.
In order to have a fair shot, you have to understand How the Stock Market Works and Why Stock Prices Change. Once you understand the basics is the time you begin to formulate your investing plan.
So what kind of planning is there? Let’s talk about the four most important.
- Growth Investing. This is the riskiest strategy. The idea is to look at a business and predict what the next few months or years looks like for the business, and then figure out if the value of the stock will go up. If so, you buy and wait till it gets as high as you think it will go, then you sell. Fortunes are made and lives are ruined this route. If you are going to be doing the investing on your own, then micromanaging in this manner is almost certainly too risky.
- Value Investing. Value trading is the idea that the market-price of a stock isn’t really what the stock is worth. Value investors look for stocks that are “cheap” and have a long-term value — 10-20+ years. These investors go for the long haul. They (should) eat recessions for breakfast.
- Dividend Investing. A dividend is the money that a company decides to send to the stock holders. It certainly makes sense that companies would give out dividends. After all, stock investors are part-owners in the company; it only makes sense that the part-owner will get part of the profit.
- Some investors focus on the dividends when buying stocks, which is important because some companies don’t pay any dividends at all.
- Cone Investing. This is the most “in depth” philosophy, and is one that’s a bit off the beaten path. The investing philosophy is based on the idea that government rocks the market — and the investors should see that coming. This is investing with an economic and political foundation.
Concluding Thoughts
Remember, investing is risky. You can always lose what you make — and then some. If you would rather see a steady guaranteed return, then check out an Online Savings Account. They are guaranteed and backed by the government and are perfect for many.
Or, if you want to try a few dollars out to “test the waters” then try out TradeKing — you can get started for $4.95. You’ll just click here, read over the benefits, scroll down to the bottom, click “Get Started Today” and will be on your way. If you don’t want to trade, just get an account for when you do.
Before I started trading, I once saw Apple stocks drop like a rock and was about to put some money in. Unfortunately, I didn’t have my account set up and couldn’t buy the stocks. The stock recovered and I would have made 20%+ in less than 2 days. Yes, I was sick. So get the account now, even if you don’t want to start trading yet, or you’ll regret it later.
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