I love how everyone is getting scared the Greece's economy has gone belly up. It has dropped the overall value of stock, but remember it is only temporary. You can actually make quite a bit if you were to find a stock with a moderate amount of volitility and ride it out of the scandal. The market will recover no problem. All things being said and done: you should probably target the small cap stocks for the biggest returns; the growth/blue chips for the steadiest returns.
Buffett said it best, "Be greedy when others are fearful and fearful when others are greedy". There is a ton of money that can be made during the next few days; might as well start shoveling.
Showing posts with label speculative investing. Show all posts
Showing posts with label speculative investing. Show all posts
Sunday, May 9, 2010
Friday, April 30, 2010
What Type of Investor Are You?
When you get your frugality down, you will have the edge on the competition. So are you a day trader who plays the market like the crap tables, going all in on a penny stock, the value investor like Buffett, a master manipulator like Soros or do you have a conservative style of the typical buy and holder? Whatever fancies your style, you need a strategy in order to invest.
If you were able to take the money you saved and make it work for you, that would be ideal. But, if you are started out doing it, the best thing to do is probably hold on to your job and invest conservatively at first, but as you make trades and investment deals, you need to be prepared to build up for the next big thing. I have been able to take this mindset and run with it. I would suggest saving up to ten grand (like me) and then get your feet wet in investing heavily. You can out forth small amounts of sweat equity or try to invest passively per paycheck. If you happen to make around 3-4K a month, I would suggest trying to build up contingency investments like a 401K or a Roth IRA in case if things go sour. I would say that most of your saving should go towards the next investment, but conserve at least 50% of your cash for other investments.
If you are young, I would say that you should be prepared to fail first. I am not saying go out and totally lose your money, but be prepared to bounce back from losing. Losing is not a part of anyone's strategy, yet no one prepares to lose. Most people are usually wiped out of funding by their first venture or in less than three years. The way to counter loss is to have a nest egg. Who knows, you might not make a profit until the second or third year. That is usually the case for big box retailers. I am not saying stick it out if your losing because the only ones that can really do this is corporations like Wal-Mart or Costco.
Now if your in it to win it, remember one's personal investment style will not lead to success by merely mimicing the style of the gurus; you need to branch out and find your niche. While my style is value investing and buy and hold, it is still evolving. Who knows, it might switch to a growth stock, penny share strategy. I am finding my niche as well. And it will never be complacent with just stocks; I want to invest in other areas as well. So what type of investor am I? Probably 60% Buffett, 20% Vulture, 20% Dividend Investing. I will never truely know how one guru totally thinks, so why bother trying to emulate their success. I would rather become the guru by replicating success.
If you were able to take the money you saved and make it work for you, that would be ideal. But, if you are started out doing it, the best thing to do is probably hold on to your job and invest conservatively at first, but as you make trades and investment deals, you need to be prepared to build up for the next big thing. I have been able to take this mindset and run with it. I would suggest saving up to ten grand (like me) and then get your feet wet in investing heavily. You can out forth small amounts of sweat equity or try to invest passively per paycheck. If you happen to make around 3-4K a month, I would suggest trying to build up contingency investments like a 401K or a Roth IRA in case if things go sour. I would say that most of your saving should go towards the next investment, but conserve at least 50% of your cash for other investments.
If you are young, I would say that you should be prepared to fail first. I am not saying go out and totally lose your money, but be prepared to bounce back from losing. Losing is not a part of anyone's strategy, yet no one prepares to lose. Most people are usually wiped out of funding by their first venture or in less than three years. The way to counter loss is to have a nest egg. Who knows, you might not make a profit until the second or third year. That is usually the case for big box retailers. I am not saying stick it out if your losing because the only ones that can really do this is corporations like Wal-Mart or Costco.
Now if your in it to win it, remember one's personal investment style will not lead to success by merely mimicing the style of the gurus; you need to branch out and find your niche. While my style is value investing and buy and hold, it is still evolving. Who knows, it might switch to a growth stock, penny share strategy. I am finding my niche as well. And it will never be complacent with just stocks; I want to invest in other areas as well. So what type of investor am I? Probably 60% Buffett, 20% Vulture, 20% Dividend Investing. I will never truely know how one guru totally thinks, so why bother trying to emulate their success. I would rather become the guru by replicating success.
Saturday, April 24, 2010
Tax Season is Over
Tax season is over and those of you that got their IRS refunds at the last minute probably have holes burning in their pockets from the stimulus plans out there. There definately is a lot of good refunds coming back, but should you reward yourself by spening the money quickly?
I would not condone this behavior. You paid taxes on that money and now it is being given back to you. It was your money to begin with, not the governments. Also if there were any complications in the return they have to be resolved after words so they can be accounted for audits, admendments, and anything else that falls into the tax catagory.
When the smoke truely clears, you have three options to use your tax money: a) you can wait for the smoke to clear and save your hard earned cash, b) you could spend it on something that you want, or c) you could re-invest it. I would go with a combination of either a) or c) or just do c). b) should be covered under the 1 luxury per month plan.
So everybody knows how to save a tax return, but how do you invest a tax return? Well, there are a number of options. There are stocks, bonds, index funds, real estate, and speculative ventures. The most prudent of the 5 when starting out is stocks and bonds. Here is why: stocks can be bought in either small amounts or large amounts and the amount used can be controlled by how much you put into a company. Bonds on the other hand is like an IOU either from a company the U.S. government. You can buy bonds at fixed amounts and just hold on to them and cash them in when they mature. Note that bonds are mainly a long term investments so I would not bother trying to cash them until they totally mature or until you can sell a bond for more than what you paid for it. There are advantages to the bond in the sense that you can sell them at loss and write off the loss on next years taxes.
I would not condone this behavior. You paid taxes on that money and now it is being given back to you. It was your money to begin with, not the governments. Also if there were any complications in the return they have to be resolved after words so they can be accounted for audits, admendments, and anything else that falls into the tax catagory.
When the smoke truely clears, you have three options to use your tax money: a) you can wait for the smoke to clear and save your hard earned cash, b) you could spend it on something that you want, or c) you could re-invest it. I would go with a combination of either a) or c) or just do c). b) should be covered under the 1 luxury per month plan.
So everybody knows how to save a tax return, but how do you invest a tax return? Well, there are a number of options. There are stocks, bonds, index funds, real estate, and speculative ventures. The most prudent of the 5 when starting out is stocks and bonds. Here is why: stocks can be bought in either small amounts or large amounts and the amount used can be controlled by how much you put into a company. Bonds on the other hand is like an IOU either from a company the U.S. government. You can buy bonds at fixed amounts and just hold on to them and cash them in when they mature. Note that bonds are mainly a long term investments so I would not bother trying to cash them until they totally mature or until you can sell a bond for more than what you paid for it. There are advantages to the bond in the sense that you can sell them at loss and write off the loss on next years taxes.
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