Thread: Investing 102
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Old 03-11-2018, 08:58 AM
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GregWeld GregWeld is offline
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I stole this fair and square ---- but it is well defined investment strategy....

So much of this thread has been about buying not selling.... buying when the poo hits the fan vs selling every time you hear some talking head saying the sky is falling. Holding great companies (think in that way versus "stock") and collecting part of your profits (since you are an owner in that company). I read this and thought I needed to copy and paste it here.

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Memorize this affirmation: "I am an investor; I am not a speculator."

All together now: "I am an investor; I am not a speculator."

As investors, we:

Buy stock in solid businesses. We expect to be rewarded over time through share price appreciation, dividends, or share repurchases.
Don't time the market. And we certainly don't speculate when we buy stocks. Speculation is what day traders do.
Focus on the value of the businesses we invest in. We try not to fixate on the day-to-day movements in stock prices.
Buy to hold. We buy stocks with the intention of holding them for the long haul.
Tune out the noise: Put down the newspaper, turn off CNBC, and opt out of those alerts on your phone. None of it is doing you any good.

Fixating on the market's minute-to-minute news won't help you make your next brilliant financial move. That chatter is mostly noise. And it's costing you a serious amount of sound sleep — and maybe even some actual money.

Spread out your risk with a solid asset-allocation plan.

You should be building a portfolio (or working toward it!) that includes a bunch of investments that don't always move in the same direction — bonds and stocks, for example. You need to diversify.

Putting an assortment of eggs in various baskets isn't the only way to spread your risk. You can also avoid the risk of investing in a company at exactly the wrong time. Say you're interested in buying shares of Scruffy's Chicken Shack but you just don't know when to pull the trigger.

The answer? Take a bunch of shots!

Practically speaking, you do this through dollar-cost averaging (this means accumulating shares in a stock over time by investing a certain dollar amount regularly) through up and down periods.

So every month for three months, you purchase $500 of Scruffy stock, regardless of the stock price. The beauty of this system is that when the stock slumps, you're buying more, and when it's pricier, you're buying less.

"Buying in thirds" is another way to average into an investment: Simply divide the total dollar amount you want to devote to a particular investment by three, and pick three different points in time to add to your position.

Stay strong, think long!
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