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Friday, June 12, 2009

 

Invest it!

Investing is primarily a passive process.

*It simply involves the buying and selling of passive financial instruments such as stocks,bonds,options,certificates of deposit,and so forth.

*Althought investing can be done a minutes a day,the results are accumulated and compounded over long periods of time.

3 steps of investing

1) Filtering

2) Timing in

3)Timing out

The road to winning!

Lesson 1: The longer you invest, the lower your risk.

25 year holding period has shown to give you a zero risk situation.

Lesson 2: If You Can't Beat'Em,Join'Em.

Index fund VS Professionally Managed Mutual Fund.

Lower costs,0.2% Higher costs,2% or more
Lower portfolio turnover Higher portfolio turnover
Low transaction fees Higher transaction fees
Low tax consequences Higher tax consequence

Lesson 3:The sooner you buy, the richer you can become.

Take 50% of your monthly, savings and sock it away into yor chosen index fund

1)Dollar cost averaging

Works only if you continue buying.
*You don't have to be smart.You can be a total idiot and still win.

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