Monat: Oktober 2020

Good and Bad Strategies for Investing in Securities

Last week we talked about evaluating securities investments, today we are going to discuss a couple of good strategies, and a few bad ones for investing in securities.

Buy-and-hold

This is one of the most common strategies, and I don’t see anything wrong with it!

You buy stocks in a specific company, that you have researched, and then hold it for a long time!

The key here is that you have researched the company, and you don’t plan to watch the price every day. You plan to hold it for years, and don’t worry about little volatilities over the short term!

Dollar-Cost Averaging

Dollar-cost averaging is my favorite way to invest in the stock market. This is a very simple strategy that takes the emotion out of your investments. This is also why I prefer investing in the TSP and index funds, over purchasing individual stocks.

The idea of dollar-cost averaging is simple; you buy the same dollar amount of stock every month, no matter what.

When the market is trending upward, you invest 0/month, and when the market is trending downwards, you still invest 0/month. This allows you to invest without making emotional decisions and averages out your return. When the market is down, your 0 purchases more shares, and when the market is high it buys fewer shares, but at a higher value. Either way, you just keep investing in the market for the long term.

This is how your TSP works. If you chose to contribute 10% of your paycheck to your TSP, then you will buy stock with 10% of your paycheck regardless of what the market is doing.

This is simple, emotionless, investing at its finest.

Other Strategies

There are a ton of ways you can invest in Securities. Many of them are great options, and some of them not-so-great. While I utilize real estate as my main investment vessel, I have utilized all of the above strategies, and I definitely love index funds, the TSP, and some dividend stocks.

Below are three strategies I personally stay clear of. I would advise you to be extremely cautious when people are talking about how much money they make using these strategies.

I won’t tell you these strategies can’t be lucrative, they can, but in my experience 95% of the people talking about these strategies make more money teaching them, than they do using them.

Until the day one of these investors shows me their portfolio, or tax return, to validate their personal return (not what one of their mentors earns), I won’t touch these strategies.

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My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase „I don’t get paid enough“ entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom!
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