Beware the Dinner-Party Investment “Tip”
After all the pyramid and stock investing talk, it’s time to think about the less formal ways investment decisions may come about. Dinner parties and pub talk are great ways for socialising but not so hot when it comes to investment strategies. In fact, you could do worse than take a contrarian view and sell when everyone’s talking about buying and vice-versa. Rather than thinking short term and chasing after the next big stock rise tipped at dinner-party tables, I believe it’s better to behave like a long-term investor. For me, this means owning low-cost index mutual funds or exchange-traded funds (ETFs) in the most tax-sheltered manner i.e., using pre-tax money in retirement accounts like 401ks, IRAs etc
It should be pointed out that I don’t think buying individual shares is the central pillar of any smart wealth building strategy. Unless you’ve got oodles of time on your hands and a real penchant for technical analysis I suggest avoiding spending the remainder of your stock investing days, hand-picking individual stocks.
If you really must, and you’ve already built up sufficient security elsewhere in your investment portfolio (as per the investment pyramid framework mentioned above), it’s ok to play with a very small amount of capital (e.g. less than 10%) on buying stocks directly so long as you’re thinking long-term and intend holding onto these stocks for years or possibly even decades!
Find out more in my next post:
Share Market Tips: Know Your Fundamentals
About Keelan Cunningham
Keelan Cunningham is an entrepreneur, multiple business owner, author, and personal finance/wealth building specialist. Keelan’s passion is helping people improve their business acumen and personal wealth creation strategies, so they can lead a truly wealthy life in all aspects and with any luck similarly transform the lives of others.
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