If you think about it, the whole philosophy to all investment advice boils down to telling you how to buy at a low enough price, and then sell when the prices look up. Simply right? Well not really, within that simple premise lies a world of potential complexity!
Even the conservative mutual fund market takes some research to choose. This is YOUR MONEY we're talking about so you want to be very careful every step of the way when making investment decisions.
The reason that things can pan out so badly, is that, the investment in the stock market (or even most mutual fund committees) is mostly dealt on by either an amateur investor or a short-sighted professional whose formulae know no better; and there is hardly anything scientific about the way the amateur investment process goes about its business. People like that love to buy stocks like they buy cars - if it looks good, and a couple of your friends have it, how bad can it be? They probably haven't heard of investment advice from the conscientious investors, that recommends investment strategies like asset allocation. These do sound kind of intimidating, but give it a listen, and you'll know that just about anyone could swing these.
These complicated terms really just mean this: invest regularly in so many different kinds of companies and stocks, that poor performance in no one area will stick it to you that hard. A properly spread-out holding of bonds, stocks and real estate that take the counsel of all kinds of well-recognized indexes, is where you're supposed to put your money. What people do usually, is, when they see something going up, they wait for a while to make sure that it does keep going up, and then they buy: when the stock is close to topping out. And then when it heads down, they wait a while to make sure that it really is heading down, and sell when it is near its personal worst in a race to the bottom. This common investment strategy is all about momentum. And if you check with your friends on what to buy, and not an analyst, you tend to get momentum investment advice like this.
The most important asset you can have is your financial and investing education. You dont' have to go to college for this, there are many successful investors who are completely self taught and they fantastically well in the stock market, bonds, funds and commodities. Have a passion for making returns on your invest, get excited about growing your money and making it work for you.
copyright©2011 ask me about money