Stocks
Almost ten months ago I set up a Roth-IRA account, with which I could do my own stock- market investing. I am happy to announce that finally, I am back in the black! That is, my retirement account is no longer losing me money. The historical graph below shows how I managed to make an impressive 0% return on investment while the broader U.S. market made almost 10%.
And now, if you would like to try to replicate my results, I will give you two simple, tried-and-true methods:
#1: Pick amazing stocks. I do not mean, “pick good stocks”, or even, “pick great stocks”. I mean, pick AMAZING stocks. These are stocks that do things like go up 100% in one year, or 25% in a quarter, or perhaps even 10% in a day.
#2: After you pick out a nice little basket of amazing stocks, you must trade them like crazy. The more often you buy and sell, the heftier the brokerage commissions will be. In addition, the more buying and selling you do, the more likely you will be to miss some of the gains of your amazing stocks. In fact, if possible, try to trade so often that you break SEC rules and are assessed a fine.
A fairly easy game-plan, no? Only two simple rules! If you diligently follow these two investing rules, I can guarantee you many decades of financial stagnancy and underperformance.
Bonds
My favorite sports story of the year so far is about Barry Bonds’ record-setting home run ball. The ball was purchased by Mark Ecko (founder of ecko urban clothing brand) for over $700k. He then had fans vote on the fate of the ball, and the final decision was to imprint the ball with an asterisk and donate it to the Hall of Fame. How funny is that? The free market in action!
Well, that may not actually be a "free' market at 700K for a small, hard ball.
ReplyDeleteIf I had the money, I'd pay the Hall of Fame to put an asterisk next to all of the baseball records pre-Jackie Robinson. Cheating is all about how you write (or interpret) the rules.
Sounds like whoever is collecting the the brokerage fees is looking to buy the next record setting baseball!
As for stock investing, I think that everybody has to learn things on their own. There is no guarantee, unless you invest in a low, fixed-income investment that guarantees that you will not even keep up with inflation. In my opinion, the best thing to do is become familiar with the companies before you invest.
ReplyDeleteBy the way, do you have a retirement date?
-The market is free, not the ball
ReplyDelete-Cheating is indeed about how you write/interpret the rules
-My tentative retirement date is age 57, or the completion of my degree, whichever comes first