I have a few basic tenets for investing;
- (1) I do not Buy and Hold
- (2) I tend to be more Aggressive than Conservative
- (3) When the market is bad in the United States, I invest in other countries
- (4) I do not buy bonds or CDs for the long term and
- (5) I use the Keep It Simple Stupid (KISS) method.
I’m sure there are other tenets but these are the five I try to keep in mind when I am investing.
I use some free tools available on the Internet; (1) Stock Charts (2) Fund Alarm and (3) Yahoo! Finance to help me with my investment decisions. Formerly I used Yahoo! Finance for all of my charting. But I like all of the features of the Stock Charts web site and it is more useful to me now that I have learned the ins and outs. Both Stock Charts and Yahoo! are free so try them both to see which you like better. Yahoo! has a feature on their charts called Interactive Charting, which is nice. I also use Yahoo! to track my portfolio online. Let’s take a look at Stock Charts.
If you go to the Stock Charts web site the chart that shows up on the left, is $INDU. $INDU is the Dow Jones Industrial Average symbol that Stock Charts uses and it shows the market for today. On Yahoo! they use the symbol ^DJI. Yahoo! has a little chart on the right side that shows the activity for the day. If I were a day trader, that might be useful, but since I am not, I like the charts from Stock Charts better.
In charting a stock or mutual fund there is an expression that goes, “The trend is your friend.” So you should always go with the way the trend is going. On purchases, if the trend is up, you want to be a buyer. And conversely if the trend is down, you want to be a seller. So you buy when the trend starts up, but when exactly? And how do you know that you are not buying at the top? Those are two good questions. I’ll answer the first question in this post. So let’s take a look at an example. Continue reading Investing For Retirement Course 101