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What Investments Should You Choose Right Now?

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http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now

What Investments Should You Choose Right Now?

There is always a risk in giving or receiving investment advice. Many times do we read that an expert is making suggestions based on “what their charts show.” There may be useful information in their research but there is also a huge fudge factor. This is because the “expert” is not really giving you specific advice but only relaying what their “chart” might be predicting. Meanwhile, as the market is heading downward every day, you are wondering this, what investments should you choose right now?

General versus Specific Investment Advice
General investment advice, when it as some value, is based on past performance. For example, money invested in the US stock market and left there over time tends to out-perform other investments such as bonds, real estate or bank deposits. So, is it good general advice to invest in stocks? Yes, it is. But, in order to correctly follow this advice you need put money in an index fund that follows the S&P 500 or perhaps the Dow Jones Industrial Average. And, you need to leave it there through good years and bad. This is because individual investors are typically not very good at timing the market.

An interesting article in The Balance shows us 20 years of stock market returns by year.

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What Investments Should You Choose Right Now?

  1. 1. What Investments Should You Choose Right Now? By www.ProfitableInvestingTips.com
  2. 2. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now There is always a risk in giving or receiving investment advice.
  3. 3. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Many times do we read that an expert is making suggestions based on “what their charts show.”
  4. 4. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now There may be useful information in their research but there is also a huge fudge factor.
  5. 5. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now This is because the “expert” is not really giving you specific advice but only relaying what their “chart” might be predicting.
  6. 6. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Meanwhile, as the market is heading downward every day, you are wondering this, what investments should you choose right now?
  7. 7. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now General versus Specific Investment Advice
  8. 8. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now General investment advice, when it as some value, is based on past performance.
  9. 9. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now For example, money invested in the US stock market and left there over time tends to out-perform other investments such as bonds, real estate or bank deposits.
  10. 10. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now So, is it good general advice to invest in stocks?
  11. 11. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Yes, it is. But, in order to correctly follow this advice you need put money in an index fund that follows the S&P 500 or perhaps the Dow Jones Industrial Average.
  12. 12. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now And, you need to leave it there through good years and bad.
  13. 13. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now This is because individual investors are typically not very good at timing the market.
  14. 14. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now An interesting article in The Balance shows us 20 years of stock market returns by year.
  15. 15. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Negative stock market returns occur, on average, about one out of every four years.
  16. 16. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Historical data shows that the positive years far outweigh the negative years.
  17. 17. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now The average annualized return of the S&P 500 Index was about 11.69 percent from 1973 to 2016.
  18. 18. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now In any given year, the actual return you earn may be quite different than the average return, which averages out several years’ worth of performance.
  19. 19. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now To benefit from the long term growth of US stocks you need to stay in the market for at least five or ten years.
  20. 20. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now This is how many years you need to stay with an investment to make it long term.
  21. 21. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now So, what investments should you choose right now based on this advice?
  22. 22. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now You should pick a broad-based index fund that follows the S&P 500 or Dow, add to your investment on a continuing basis and stay with the investment through thick and thin.
  23. 23. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Based on past experience, your investment will out-perform others over the years.
  24. 24. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now What Investments Should You Choose Right Now to Avoid Losing Money?
  25. 25. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Maybe the thought of watching your investments fall in value by another twenty or thirty percent is a bit too much.
  26. 26. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now And, maybe you are not so sure that the market will come back very fast once it gets done correcting.
  27. 27. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now If this is the case, you are looking for ways to invest without losing any money.
  28. 28. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Bank deposits are protected by Federal Deposit Insurance.
  29. 29. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now US Treasury bonds, notes, and bills when help to maturity will return you investment plus interest.
  30. 30. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Likewise, AAA and AA bonds are good ways to invest and protect your capital.
  31. 31. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now However, none of these investment options compares in return over the years with the US stock market and well-chosen stocks.
  32. 32. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Choosing Specific Investments Right Now
  33. 33. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now An ETF that tracks the S&P 500 will provide a good rate of return when held for five, ten, or more years.
  34. 34. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now But, there are stocks that will outperform the rest.
  35. 35. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now How to you choose them? The key is to apply the concept of intrinsic stock value.
  36. 36. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Successful investors who apply this approach are always looking for profitable stocks to invest in.
  37. 37. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now They look for companies whose business models are clear and likely to provide good returns over the coming years.
  38. 38. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now These investors do not necessarily buy those stocks right away.
  39. 39. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Rather they wait for a stock market correction.
  40. 40. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now The company they have chosen already has an intrinsic value greater than the market price of the stock.
  41. 41. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Then, with the correction, the stock becomes more of a bargain.
  42. 42. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now A solid long term investor will typically have several promising stocks on his buy list.
  43. 43. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now But, he or she will only purchase those stocks when the current price is substantially less than the intrinsic value price.
  44. 44. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Then the newly purchased stock provides a forward-looking income stream and profits for years and years.
  45. 45. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Specific Stocks Suggested by “Experts”
  46. 46. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Forbes has an article suggesting that you “hold your nose” and buy US stocks.
  47. 47. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now They allude to the futility of trying to time the market and the value of long term investing.
  48. 48. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now If your investment horizon is over two years for investing your money, don’t sell!
  49. 49. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now You will just set yourself up for the impossible task of winning a market timing contest, and realizing losses.
  50. 50. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now History demonstrates that it’s better to stay in the game so you don’t miss the short periods when stocks sharply recover.
  51. 51. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now The specific stocks suggested in this article are not the high tech darlings that are household names.
  52. 52. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Rather they are companies that routinely make money and are somewhat undervalued compared to their current market price.
  53. 53. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now United Rentals: down 40% this year People’s United Financial: Down 16% this year
  54. 54. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now These may be good suggestions but we strongly advise that rather than acting on these stock tips that you carry out your own fundamental analysis before buying and holding for the long term.
  55. 55. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Are There Stocks You Should Sell Right Now?
  56. 56. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now This gets us back to intrinsic value as a guide to stock investing.
  57. 57. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now There are stocks with great names and traditions that are no longer stellar long term investments.
  58. 58. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Kodak was a prime example. They invented the personal camera, camera film, and commercial film developing.
  59. 59. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now For much of the 20th century dominated the market and then digital cameras came along and Kodak’s business model no longer worked.
  60. 60. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now IBM was the king of big central computers and took a big hit from the invention of the PC and faster chips.
  61. 61. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now IBM was able to transition into other parts of the computer world but they are no longer the company whose stock you should never sell.
  62. 62. http://profitableinvestingtips.com/bond-investing/what-investments-should-you-choose-right-now Whether the market is going up or going down, when you have a company whose business plan no longer works and whose stock value is being propped up b stock buybacks, you should probably sell and avoid future pain as the stock slides into oblivion.

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