Stock Investing Isn’t Really THAT Hard!
New stock investors, or potential ones, can sometimes get scared away by all the buzzwords that are thrown around by analysts and experts. The more you read and delve into learning how to buy stock and grow your money for retirement, the more apt you are to run into things that might totally confuse you.
Let me show you an example of what I mean from last week before Apple (AAPL) announced its earnings. Now Apple is one of the most followed and talked about companies on the planet and earnings time is met with much anticipation not only from shareholders but by the whole technology industry. Apple has changed (improved?) our lives with their products and A LOT of people are interested in their every move.
You have to live under a rock to not know that Apple stock has done very well over the last handful of years and a lot of people now own the stock. The only question is though, will they continue to beat their earnings estimates and will the stock continue to go up? There are all sorts of opinions about this but most stock analysts have a buy rating on the stock and most think it will go significantly higher. But for it to do that, every earnings announcement needs to be great and thus the anticipation and hoopla.
My investment strategy is pretty much one of buying and holding stocks that I think are good until I decide it is time to sell. Not much fancy stuff from me like shorting, using call options, puts, put spreads, bull put spreads and all the other stuff you might see in articles like this one or this one that came out right before Apple’s earnings. Those articles can make your head spin!
Buying stocks and making money over the long haul is easy at its core: buy stocks you think will do well and sell them at a higher price than the price you paid. You don’t need to get involved (or even learn) all the different things like the ones mentioned in those two articles. You don’t need to try to time the market. You don’t need to figure out whether a stock typically goes up or down after earnings. You don’t need to “protect yourself” right before or after earnings or at any other time. You don’t need to do anything other than to always try to pick winning companies and that is hard enough in itself.
Admittedly there is more hype about Apple stock than any other stock and so there is more news and articles detailing all the different strategies you might have. However, for most investors, trying to do what those articles and ones like it describe is just silly. There is no need to be confused and intimidated by all those fancy stock terms and thinking you should be doing those things will probably only get you in trouble. Those strategies are for investors who have been around a while and know what they are doing. I mean, REALLY know what they are doing.
If you are like most investors, sticking with the basics is the best option in my mind and the basics are buying low and selling high. Simple as that. I’m not saying you shouldn’t learn as much as you can and try to understand new terms and strategies because you can and should. However, you should do that AFTER you get familiar with the basics and you shouldn’t let the prospect of learning all that new terminology get in the way of you putting your first dollars in the stock market.
