- Get started NOW!
- Some investment need a minimum amount, but start saving in a piggy bank or a separate savings account.
- Investments that have a low initial investment minimums are cryptocurrencies, CDs and stocks.
- High interest loans/credit cards should be payed off first. It is a sure liability generally higher than any sure asset.
Find the right account(s) and/or advisor(s)
- Do your homework, investments and advisors are not all the same. Once chosen, test to make sure they are what you expected. Do not settle for ones you do not like.
- Online brokers have the lowest fees for self mangaged and advisor managed.
- Multiple accounts may be needed for different types of investments.
Put safe guards on account(s)
- Always choose a very strong password. And of course do not share this password with anyone!
- Put limits on investments.
- Overall diversity would be between major categories like bonds, cash, cryptocurrency, precious metals, stocks, etc.
- Also diversify within each category
Use your head and heart
- Use your head by checking news, charts, statistics, etc.
- Let your heart play a smaller part in your decisions.
Never let your investments go unmonitored
- Review them often if simply to keep up with their current status.
- It is good to do a yearly rebalancing.
- If you do not want to manage your investments, then go ahead and find a good advisor.
Always keep taxes in mind
- IRA accounts can be used for day trading. There will be fees, but not taxable events until withdrawing for retirement.
- Any investment is considered a short term investment when held less than a year. This means higher taxes!
- $3000 worth of investment losses can be written off each year.
Growth vs Income
- Younger investors can be agressive and lean toward growth investments.
- Older investors usually lean toward income for security.
Different stocks can cover any mix needed.
- Stocks with no dividend are usually growth stocks.
- Stocks with dividend are usually income stocks.
- Some stocks have good growth and have pay a dividend.
- Cryptocurrencies and precious metals are generally considered growth investments.
- Bonds, CDs and mutual funds would be income investments.
Watch for cycles
- Precious metal are usually inverse to other investments like stocks.
When quality stocks have a large drop...research and consider buying. Some are quick and some are long drops. So, judgement is definitely needed.
- WMT: All of 2015
- RHT: 2016/12/21
- GE: All of 2017
- COST: June 2017
- DE: August 2017
Industries have cycles.
- SIX: Always dips though Summer...then earning come in!
- DIS: After a big movie...earning can give the stock a jump.
- SCI: The baby boomer are getting older.
- Industries and raw material suffer more than consumer goods in a poor economy.
Is a stock a hot trend? You can ride the wave, but be ready to unload when the trend is over.
- TSLA: Has had a good run, but are having issues with facotory equipment and competitors.
- NFLX: Too many competitor and P/E is way too high.
- If an investment is not performing as expected...consider unloading for something different.
- Choice of invest or buying luxury items.
- High interest loans/credit cards should be payed off first. (same as above)
- Participate in ESPP
- Participate in 401K