Category: Investors

Even buy and hold investors have to sell at some point. Yet the market has ADHD these days, and news gets people selling low and buying high quite quickly. Since you want to do the exact opposite, you have to make sure you can stomach the ride. You want to pick serious investments that you feel have true potential. It helps when the companies you choose have already established a good track record of proving potential and chasing growth.

If you choose to initiate speculative positions, you’re not going to win most of your battles. You want to pick investments that help you build, and that takes time. You can also trade stocks, but that requires that you pay close attention to the market. If you are going to do that, you need to really have some serious money invested. In other words, trading is for more established and seasoned investors. If you work a lot, you’re not going to want to be paying attention to the market all the time.

You can also pursue swing trading if investing is an interest of yours. Yet that still requires you to pay close attention to the market. For small investors, my philosophy is always buy and hold. That will give you a much better chance of compounding and building that nest egg. A good solid company that pays a dividend each quarter is your best bet. That dividend gets paid, and then your dividends start to make dividends. You hope as well that the price of the company’s stock continues to rise.

Over the long term, you’re looking for sustainability on all levels. The companies you choose have to stay relevant. So many people look at newer companies and think that they have the best potential, but the truth of the matter is the track record isn’t there. Picking a company that you’re going to invest in for a few months is completely different than picking a company that you’re going to hold for years.

You want to build up a nest egg to help take care of your family and provide for retirement later on down the road. In order to do that, you have to do what’s necessary in order to build. Make wise investment choices in companies that are going to reward their shareholders. It’s not easy in this day and age to pick the best investments with the way the market is acting. Yet you’re not picking them to win the race now. You’re picking them to build for the long term. Think about that as you make investment decisions because it’s about perspective.

You’re going to be building up a strong portfolio over time. If you’re all over the place with your decisions, then you’re not going to be able to build your nest egg. Trust me, I’ve made the same mistakes. You’re going to have to really consider your investment choices carefully because you want to be able to see good returns for your portfolio. You can do it, but it requires patience and discipline. Get more information about investments here.

How long have you been investing? Whether you are a novice or a seasoned investor, you’re going to make mistakes. You aren’t perfect and neither is the market. That is why you need to make calculated and educated decisions. One of the things I picked up along the way is the more you trade, the bigger chance you have of losing money. That means it’s better to take on a buy and hold philosophy, but it still matters what you’re holding of course.

In hindsight, I should have done much better with buying and holding. As an investor, I am attempting to do that now. As mentioned, it is also important to choose the right investments. When looking at stocks, a good rule of thumb is to first stay away from penny stocks. You want to pick companies that are doing well financially, and penny stock companies are often not in that category. You still want to find stocks at a value though, and the metrics really matter.

You want a company that is financially stable. You want a company that is growing. As a buy and hold investor, you might want to choose stable companies that pay dividends and have a solid track record. Many people pick companies that they want to hold for the short term. Yet if they screen with the perspective of holding for the long term, they realize that they wouldn’t choose those stocks.

You want to make wise investment decisions. One metric I look at is earnings per share or EPS. I also pay attention to the P/E ratio or price to earnings ratio. It’s nice to look at the dividend history for a company as well in order to see if there is a history of increases. There are a ton of other metrics to look at, but let me be very clear. The more stable blue chip type companies you pick, and the longer window you have, the less you have to scrutinize your stock picks like a day trader.

That doesn’t mean you don’t screen them. It doesn’t mean you don’t scrutinize your picks in order to make wise investments. However, you can take things too far, sending yourself in circles if you look at too much data. You have to make your picks and turn the market off. If you follow the market too closely these days, you’re going to be buying and selling like a day trader. That’s not what you want to happen. You want to make good investments and build by compounding. Click here to learn more about good investments.