Saturday, 14 November 2015


Some more info on the "BUY AND HOLD" strategy.

I'm  a big believer in keeping things simple.

Stock markets through history have basically always travelled on an upward trajectory. Historically at a rate of 7-12% per year, depending on what index you're looking at. This sits true for most first world markets (US, UK, Australia, Germany etc...)

Long story short, look at a bunch of shares in your country that sit in the top 50 shares. Most Experts will say that you should spread your purchases over at least 10 companies in a few different asset classes. They'll mostly go up at some point and you'll be bound to make some money off either the share price increase or the dividend payouts. Its not that hard is it?

For more information buy local financial magazines and check out stock market websites for recommendations on what to buy in your country, look at company reports for dividends/earnings/forecasts etc.... you might be able to give your capital gains a good shot in the arm by picking the right shares set to rise

High dividend stocks are usually a winner too.... look at the dividend history of the company you are investing in, consistent high dividend yeilds will usually hold value better in turbulent markets and rise faster in strong markets

Of course there are some exceptions to this rule. What if you bought right before the 2008 GFC? Yes fair call there are some shares which are still lagging and feeling the effects of that doozy as I write this at the tail end of 2015. Even in that worst case scenario you would still be receiving dividend payouts from your investments.

Of course if you were putting in regular contributions to your share fund, anything you bought after that (like say in the latter half of 2008-2010) you would have gotten a lot cheaper than the pre 2008 prices so time would have equalized much of that out anyway.

Not everything you will be a winner, you'll have some purchases that really pay off for you in a big way and some that flounder around doing nothing and some that die a horrible death. But that's really just life isn't it?

In regards to buying and selling ..... just look at the graphs for that particular stock... check it out over the course of a year and and see where it sits in relation to the rest of the year. Is it down ? Buy it. Is it up? Either don't buy it, or if you do own it sell it.

You don't need any huge amounts of financial knowledge to play the markets like this.  I think its a great way to get started and a relaxed way to learn more about the financial world while your building your share portfolio.  Yes there is some risk but if you do the right thing and keep it consistent you'll come out ahead, and usually a long way ahead of someone that just kept their money in the bank.  If you're adverse to risk then really you shouldn't be involved in the markets to begin with or even reading this site. Anything worth achieving will have SOME risk component to it.

Basically find a pattern you feel comfortable with and stick to it.

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