There’s something I’ve noticed about a lot of people who write about investing: They’re either very rich or they work as investment professionals. Now, I don’t think that that makes them unqualified to give advice to those of us who don’t have a seven (or eight!) figure net worth, but it does make it a little hard to identify with them. After all, if I had a million bucks in the bank, putting some of it in riskier investments would be a lot easier to stomach. Ditto for investing other people’s money.
But here’s the thing. I’m an investor, too. I’m not a professional one or a rich one. But I am richer than before I started. And I’m a smarter investor than I was when I started, too. I’m also getting more confident about investing money in the stock market. That said, I made a lot of rookie mistakes along the way. Here are five of the ones that stand out. Read about them in my new post on WiseBread. And try to avoid them, OK?
I think it’s safe to say that most people wouldn’t mind having a little more money in the bank. Maybe a lot more money. According to a 2008 survey by Pew Research Group, 43% of Americans report that being wealthy is “somewhat important” to them, while another 13% said that being rich was “very important.” Of course, wanting to be richer is one thing; actually accumulating that wealth is quite another. However, there’s plenty of research to support the idea that there are certain sorts of people who are likely to become wealthy — and I’m not just talking about the kind who were born that way. In fact, according to research by Fidelity, 86% of today’s millionaires are self-made. Check out 10 traits that tend to show up in the wealthiest people, and how those characteristics help them bring in the big bucks in my new post on WiseBread.
When it comes to investing, many people are most interested in stocks. Stocks are exciting. They move fast and can generate huge returns in a very short time. There’s a little bit of danger involved – like the sports cars of the investing world. Of course, that means they often stall – and if you’re not paying attention, they can crash pretty spectacularly.
That’s where fixed-income investments come in. They’re stable, dependable, and they deliver returns in the form of fixed periodic payments. They’re like a slow-moving passenger train; they don’t exactly get your heart racing, but you can depend on them to get the job done. That’s why most advisors recommend that everyone set aside a portion of their portfolios for fixed income products, such as bonds, money market funds and Guaranteed Investment Certificates (aka GICs).
GICs? Bet you didn’t consider those, right? According to Tim Wilson, Vice President and Chief Financial Officer at Equitable Trust, they’re a vehicle that investors often overlook, even among fixed income options. But maybe they shouldn’t. Find out why they deserve a second look in my new article on GoldenGirlFinance.com.
If you’re an investor, you probably have a pretty good idea of what to look for in a company. You want strong income, good cash flow, a solid balance sheet, and as little debt as possible. Those are things that not only help to create a profit, but maintain one.
Here’s a funny fact, though: Many investors fail to apply the same kind of critical eye to their own bank balances. In fact, according to the CFP Board in the U.S., Certified Financial Planners have been filing for bankruptcy in increasing numbers over the past few years. Of course, that’s true of much of the population, but we kind of expect financial pros to know better, right?
In fact, if we applied the same standards we apply to the businesses we invest in to our own bankbooks, we would all be a lot richer for it. Find out why in my new post on GoldenGirlFinance.com.
Fybrid Photos © Marta Rybak
Even for experienced investors, active trading can be a tough sell. Too often, we assume it means hours in front of a computer screen every day, monitoring stocks for a profitable movement. And it can (and does) mean that – at least for some people. Fortunately, there are many shades of gray between die-hard buy-and-hold and fast-paced day trading. One of those shades might be called active asset allocation, and while it requires keeping a trained eye on the markets, it doesn’t have to become a full-time job…which is a good thing, because most of us already have one of those!
Interested in learning more about how to get active in your portfolio? We talked to Larry Berman, an experienced technical analyst and co-founder of ETF Capital Management and the Independent Investor Institute. Check it out in my new article on GoldenGirlFinance.com.
Flickr/Fortune Live Media
Last month, we chatted with Emmy Award-winning journalist and FOX Business Network anchor Liz Claman about Warren Buffett – the unparalleled stock picker she’s had the privilege of interviewing more than 27 times in her career. In the first week of May, Claman attended the annual shareholder meeting for Berkshire Hathaway, the uber-profitable holding company Buffett still heads at the age of 82. This is a shareholder meeting unlike any other – an investor-palooza of sorts, complete with Buffett emblazoned souvenirs and more than 35,000 Buffett fans, top CEOs and even celebrities.
Claman got to spend the weekend in Omaha, Nebraska, catching up with Buffett and several other business leaders from around the country. And while she’s attended many of Berkshire’s annual meetings, this year she found something that had been missing for a few years: optimism. Read more in my new article on GoldenGirlFinance.com.
Flickr/The Cosmopolitan of Las Vegas
If you could pick just one superhero skill, what would it be? Being able to leap tall buildings in a single bound would be a great way to get to work. And wouldn’t you just love to be invisible sometimes? Oh, the possibilities…
If you’re into investing, however, there’s only one superpower that will do: the ability to divine the future of companies, stocks and entire markets. Maybe that’s why, short of a crystal ball, people have been trying every trick in the book to do just that. From peering at ladies’ hemlines to looking for a sign on the cover of Sports Illustrated, check out some of the strangest stock market predictors out there (and find out if they work) in my new article on GoldenGirlFinance.com.
Warren Buffett’s been called all kinds of things: A sage, an oracle, a wizard, the greatest investor who ever lived. In terms of his stock-picking abilities, those terms are hard to argue with. In 2013, he had a net worth of around $50 billion, most of which he earned through many years of very smart investing. But Buffett isn’t just known for his wealth and stock wizardry. In fact, this 82-year-old might be better known for the witty quips and quotes he still delivers with remarkable regularity.
We wanted some insight into what Mr. Buffett is like – and perhaps learn a few of his secrets – so we chatted with Liz Claman, an Emmy Award-winning journalist and anchor at FOX Business Network. Since joining the network in 2007, Claman has spoken with Buffett 27 times, and will be sitting down with him again in May, when she hosts a “Weekend With Warren” live from the Berkshire Hathaway Headquarters in Omaha, Nebraska.
These are the top questions we’d like to ask of the Oracle….but we don’t exactly travel in the same circles. So we brought our questions to Claman. Get some insight into what she’s learned about Buffett so far in my new post on GoldenGirlFinance.com.
Maybe beauty really is a commodity, because despite all its ups and downs as an investment, that’s one area where gold has always glittered. From the gold-dipped tombs of Ancient Egypt, to the coins and currency that were ferried across the oceans, to the simple wedding bands many of us wear today, people have loved this shiny element for centuries. And through that time, through good and bad, it has always symbolized power, wealth and permanency.
For the most part, that’s how many investors still view gold: as a hedge against inflation in the good times and a safe harbor in the bad. Perhaps most importantly they’ve seen it as something special, something whose value defies the laws that apply to other commodities and currencies alike. But when gold dropped to two-year lows this month, it left many analysts wondering whether this investment had finally lost its luster. Read more in my new article on GoldenGirlFinance.com.
You’ve probably seen it on TV or the big screen…
The clanging bell, computer screens and stock tickers, and an apparent mess of people milling around, talking, typing and sometimes shouting. To an outsider, that’s how the largest stock exchange in the world, the New York Stock Exchange, appears. But while most people are familiar with the NYSE, what they don’t understand is how all that commotion relates to the simple, silent stock purchases we so often make through a computer screen. In fact, what happens between the moment you click “Buy” and the time that stock lands in your brokerage account isn’t just a technicality – it’s one instance of how the whole stock market works. And it’s something every investor worth her salt should understand.
FOX Business Network anchor Nicole Petallides spends every business day reporting from the floor of the New York Stock Exchange. We caught up with her for an inside look into the very real place where a large portion of the world’s trades take place. Check it out in my new post on GoldenGirlFinance.com.