Previously on MooMooCoo...
On my previous blog, 2019 Portfolio Balancing, I strongly advise readers to consider more index and global fund investing. Going back to fundamentals of low cost investing and reducing risk with high volatility. High Risk, High Returns or Greater Losses (with emotions).
Prudent Investing for 2019
Maybe in our culture we consume too much of the same theatrical image of the investing world. The fast and hard stories that we see in movies, of investors that went into the market with nothing but pure courage, or just a ‘hunch’ and made millions gets our blood pumping. But real life isn’t a movie and nor should you ever want it to be either. It’s very very rare to come across an investor who outsmarted everyone and ran away with a bag full of cash. In fact the best investor of all time, Warren Buffet has made it clear that prudent investing is where the excitement is. Investing into comprehensive and broad portfolios is something to consider. Right at the top of the pile at the moment are index funds. These are indices made up of many companies and institutions in many different industries and sectors. Spread your money around wisely and you’re bound to make a profit one way or the other.
It's Predictable But...
Investing in stocks or companies that don’t offer huge returns is far from boring. Actually, how is it not exciting to consistently gain a net return on your investment every financial quarter? You can steadily watch your profits rise instead of riding the roller coaster of huge profits and huge losses. Sure, the performance of your investments might be predictable but it’s better to be predictable than not when you’re talking about making money. Buy some stocks of a giant company that is ruling the market such as Samsung. The stocks are going to be on the premium value side but, even just small share will continue to product net gains for the foreseeable future and far beyond. Something along these lines is what you should be aiming for.
Macro and micro exposure
The market is very fluid but in small pockets there are slower flowing streams and faster flowing streams. Some parts are risky and others are more stable. The balance of a great profit and a low risk is often difficult to find and or curate. Portfolio investing is one of the best ways to broaden your chances of finding something like this. However, portfolio investing can and does come in many forms. Take for example Alpha Blue Ocean where they invest in various indices.
This means that they will invest your money in various stocks and companies. If one of the investments does unfortunately fall in value and you lose some money, because the index is so varied, you’re almost guaranteed to make a profit elsewhere. It may not be a large profit but it won’t be a large loss either. This is what is so exciting about this kind of investing because, although it may be safe and stable, you always stand to make a profit. It’s almost like you can’t lose because you have spread your money around prudently.
The exposure that you put yourself up to when investing is what keeps some people from investing in the first place. However if you stick to slow but consistent investments according to historical performance you’ll likely to perform well in the stock market.