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Top Five Reasons to Run Your Investment Account
When I first opened up my own personal investment account, I wondered if I was making the right decision. After learning the ups and downs of the stock market, I am so glad I decided to start! I started running my own IRA, and I have done so well that I decided to open a non-tax sheltered account as well for my vacation fund. Over the years, I have discovered that I actually did better in my self-run accounts than I did in the accounts I had that were run by money managers! I suggest that you start small, and run an account on your own as well.
Here are the top five reasons for you to run your own investment account instead of paying someone to do it for you:
Just as it is a lot cheaper for you to fix your own car, do your own plumbing, and paint for yourself, it is a lot cheaper for you to run your money yourself. Just think about it. If you pay a man for his advice and fees to make trades, you are paying for his fancy chair, office with a view, hot rod car, etc. If you make your investment decisions yourself, you only pay for the trades you make.
In the information technology age we are in right now, you can find all the information you need online to do research for good investments. There are stock idea blogs, investment tools, stock quotes, educational sites, and advice for best investment. Everything you need to be a great investor is at your fingertips, and most of it is free!
It has been found that only 6% of money managers actually do better than the S&P 500 index fund. So by investing in SPY(S&P index fund), you are among the top 94% of investors!
I don’t know if you realized this, but money managers are the ones that move the stock prices! Because they have to deal with large amounts of money, when they sell, the stock goes down. When money managers buy, the stock goes up! You, as a small investor hardly affect the price at all. Take advantage of this fact! All you have to be able to do is buy the stocks that managers are buying after they sell, and sell them after they buy to make money. Use the stochastic charting tool on most charting software to help you know when stocks are overbought or oversold.
Really, who cares more about your money? If you lose money, it hurts you. If they lose your money, they still get paid. You are better off using that sense of responsibility to your advantage. If you care about your money, you are going to do the work necessary to help you keep and grow that money.
My advice is to keep the money that you would pay an investment professional and invest it yourself. You will be much better off.
Don’t Invest on Advice Alone
Much money has been lost on following a friend’s advice, and almost all of them are “a sure thing” in their minds. I have heard one too many stories of elderly people who dumped some of their savings into an “investment opportunity” only to find that it was not a wise investment.
There is much more to investing than just finding a person that has done it before and taking them at their word. Anything bought on a whim is a poor investment, even if you make money. I like when James Cramer says, “I don’t believe in ‘buy and hold’, I believe in ‘buy and homework’.” Any investment can start with good advice, but the best investment is found when it is followed up with a little homework.
When you buy stock in a company, you are buying a piece of the company. You should understand how they make their money, what products or services they offer, how much money they bring in or lose, how much debt they have, and what the future looks like.
You do not have to pay someone to tell you this information. It is all easily accessible from any investment website. You can find a short description of the company by entering the ticker symbol (the 1-4 letter code for each company) into any website where you can get a quote. There should be an overview that describes how a company makes money. There should also be a link to see the company’s financials (Balance sheet) where you can find how much debt they have and most websites on the company profile will tell you how much earnings the company made for each share owned (EPS or Earnings Per Share). You should also be able to find out what paid people (analysts) think about the future of the company with a link as well.
Homework is not rocket science. If you just spend a little time getting to know the company before jumping on the investment bandwagon, you will find the best investment is the one that is not a fluke.
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This is where every investor can find something to improve their money making potential. There is something for everyone here; from coaching for beginners, to tips on how to build a nest egg, from things not to do when investing to stock ideas to research.
People have made fortunes by developing the skills that are covered within the pages of this information center. The best investment you can make is taking the time to educate yourself in the skills of Wall Street. This site will help you learn how to make money your money work for you.