Thanks to the fact most of the world’s major governments are printing money in unprecedented amounts and artificially keeping interest rates low, everything you know about investing correctly is changing right before your eyes.
In this article I’ll explain why and tell you how to keep your portfolio from being sucked under.
Why Doing What Everyone Else Does is Bad
Since as long as most people can remember, investors have been trained to listen to the so-called experts or turn their money over to professional fund managers.
“We’ll do a better job than you could ever do,” was a common refrain emanating from Wall Street and the big mutual fund companies because, at least in the early days before Internet ubiquity, it was very difficult to obtain accurate data and sift through them to extract meaningful results.
And, until recently, handing your money over to others did okay – not great, mind you, but good enough to keep you coming back.
Then came the economic crisis and individual investors realized the professional money managers didn’t actually know what they were doing. In fact many of the same companies that managed your money were the same ones who caused the crisis in the first place.
Once entire economies started failing the stakes were raised. Portfolios that once did well, mostly because they took on heaps of risk, began to fall: some slowly over a few months and some like big, heavy rocks.
So if you’re still investing by putting your faith in other people without truly understanding what you’re investing in, knowing the quality of the companies where you have your money, being aware of the way they interact and considering your overall portfolio’s risk characteristics, then you need to get up to speed… quickly!
Since the economic crisis wiped out billions of dollars, mostly from the little guys, things have drastically changed.
Fortunately all is not lost. You see, the Internet changes everything. It delivers investing information almost instantaneously and allows a novice to receive a complete investment education, that even a decade ago would have taken years of study at a college or university.
And once that education is complete, the Internet provides reams of accurate financial data directly to your desktop. So now individuals can not only compete with the big fund companies, but they can do a better job because they don’t have to worry about making short term gains nor do they have to manage huge sums of money.
Individual investors are more agile, they can focus on the long term and they care more about how their portfolios are performing than the myriad faceless fund managers sitting in expensive offices raking in absurdly large bonuses each year.
Four Steps to Success
So here’s what you should do as soon as possible.
1) Understand how the four pillars of government missteps can hurt your financial well-being in the coming years. Massive Government debt, increased taxes, printing money and increasing interest rates will all combine into a perfect storm to wash away the ignorant and the unwary’s portfolios.
2) Get trained by learning about the safest investing techniques and systems that can help you avoid the coming problems. Don’t get caught like many did in the last economic crisis (because the high quality stocks rebounded, but the low quality ones did not). It’s time to update your investing knowledge.
3) Implement solid plans. Now that governments around the world have painted themselves into a very bad economic corner, there’s no turning back. These government policies will wipe out large chunks of many investors’ portfolios. Put plans into place today to ensure yours isn’t one of them.
4) Check your current holdings to see if they’re strong enough to weather another storm, and upgrade them if they’re not. Learn how to make the necessary changes before things start to negatively affect your financial health.
Do Your Research
Search engines such as Google and Bing are great places to find information. Unfortunately it’s difficult to determine which search results to follow and which to ignore. This blog can help you. Read through the past articles and you’ll be quickly brought up to speed on how to invest properly using the same techniques and strategies the world’s best investors have used to personally make billions of dollars.
So if you’re an investor who’s counting on his or her portfolio to fund important events in the future, such as retirement, children’s education, lavish vacations or anything else you deem important, you can’t afford to delay.
Start by reading this blog, then use the Search Engines to fill in gaps or answer questions you might have, and finally implement what you learn as quickly and effectively as possible.
The Five Pillars of Investing
In a nutshell, successful investing requires just 5 things: select great stocks and buy them with a sufficient margin of safety, diversify, allocate your money, manage your portfolio and rebalance.
And the nice thing is, each piece can be implemented using super-quick and proven strategies to optimize results. Once you understand the pieces and implement the strategies, you’ll be able to improve your sluggish or sinking portfolios and position your investments to thrive in a world that continually changes at the speed of light.
If you’re still investing the same way you were 10 years ago or turning your money over to others in hopes they know what they’re doing, you are putting your financial future in jeopardy. If you’re just learning how to invest effectively, now is the time to start out on the right path.
In about 3 weeks you can drastically improve your investing knowledge and ward off the potentially disastrous effects of the world’s governments’ poor economic policies that are poised to sweep away billions more from investors’ portfolios.
It’s entirely possible to do this. Warren Buffett did it. Charlie Munger did it. Joel Greenblatt did it. Benjamin Graham did it. And Peter Lynch did it too. Plus they were all kind enough to explain exactly how they did it and the thought processes behind their successes.
So clear some time on your calendar and get started. It will be one of the best investments you make in your future.