When you go to the search engines to research the term “stock market in today’s economy,” you will get a lot of advice about what you should invest your money in and what stocks you should avoid.
Much of this is traditional type advice. It’s the same thing you have been hearing for years from the self-proclaimed “experts” of the day. The problem is that much of that information is wrong.
Recently I have started to educate myself about investing. I knew absolutely nothing about investing while I was married. So we went to an adviser, and we were told the same thing everyone else is told: to stay in for the long haul, the market always tends to gain back any losses over time, etc.
After some painful, financially and emotionally, losses, I decided that maybe the information most of us get isn’t complete or even accurate.
That is why I decided to look a little more closely. I started reading books about two of today’s top investors, who seem to have become extremely wealthy only on their investments.
I like that idea. The guy we used to go to only made money when he got us, or any of his other clients, to invest in a certain stock or bond. He didn’t just live off the income he made with his investments.
This is one of the first points I remember learning when I started doing my research – why take advice about how best to invest my money from someone who isn’t “good” enough to live off their investment?
I think that is a valid point and one you should carefully consider. Both of the investors I studied had similar outlooks on their money and how they invest. They have their criteria to decide what to invest in and what to steer clear of.
It is based on their research and not what some talking head says. If the investment doesn’t meet their criteria, they don’t invest in it… period.
When the market is too hot, and all the stocks are overpriced, they don’t invest in it. Instead, they will pull their money out and put it someplace safe. Perhaps they buy gold or invest in Treasury bonds, but they don’t leave it.
They will stay out of the market for as long as it takes to rebound. Then, when a good stock, undervalued and meets their criteria, becomes available, they will buy it.
Any can learn these things of us if we are willing to take the time. So here are a few things you need to take away from this article:
- Knowledgeable investors don’t just “ride out” a bad economy. They get out early, so they don’t lose any, or as much, and put their money elsewhere until the market provides more opportunities.
- They don’t take advice from people who are paid only to give advice. Instead, they do their research and make their own decisions.
- They don’t follow the herds or the trends. Instead, they have learned from experience that most people get into the market right as it is heating up, which is when these successful investors tend to get out.
Follow the winners, continue to educate yourself, learn from your experience and create your criteria for when to buy and you can’t go wrong. If you build a solid foundation, you will never have to ask yourself what to do with the stock market in today’s economy. You will already know.
By now, you may have guessed that one of these investors is Warren Buffett, and you can get an amazing biography of him at https://amzn.to/3xgVh0X.
If you have any questions or concerns about investing, please reach out to me directly or contact another fee-only Registered Financial Consultant.
