You can check out 7million7years and other great personal finance blogs at Money Talks … in the meantime, here is today’s post …
I’ve written a whole series of posts just focused on one thing: understanding whether you are in the BUSINESS of the stock market, or are you in some other profession/business just looking to save a little or invest a lot … and, have chosen the stock market as your vehicle (instead of, or as well as, real-estate, etc.)?
If you are in the BUSINESS of the stock market, and very few of us are (I’m not), then you treat it as a Making Money 201 BUSINESS i.e. to create income (either through dividends, profits on trades, or capital appreciation).
“You puts your money and you takes your chances”, as the old fair-ground spruiker once said.
If you are NOT in the BUSINESS of the market, then what should you do? Well, go back and read those posts, starting with this one …. they are designed to STOP you wasting your time chasing the impossible so that you can INVEST more time in the activities that will actually stand the best chance of making YOU money.
I received a couple of important comments from Moom to that post (and the one the day before):
The point here is to understand which side of the fence that you lie; it’s a Binary Choice:
1. Dollar-cost-average into low-cost Index Funds over a 20+ year period, OR
2. Spend the time and effort to identify 4 to 5 undervalued companies that you understand, love, and believe have a strong reason for being able to stick around for, say, 100 years (try Coke … except it’s not undervalued) and buy those to hold for 20+ years or until the market ‘wakes up’ to their true value (I have nothing against you trading/in out of these stocks on the way up … equally, I have nothing against you just holding them).
The SAVER is looking for market returns over 20 years by dollar-cost-averaging into safe Index Funds: $100k becomes $400k+ (the reality is that they will be topping up regularly for an even bigger nest-egg circa $1 Mill.)
The INVESTOR is looking for circa DOUBLE market returns over 10 – years by investing in the stocks of a few well-chosen undervalued businesses: $100k becomes $1.4 Mill.!
To me, there are NO other [stock market-related] choices for the non-gambler (who is in the ‘business’ of trading/speculating a la Soros and a select few).
The 7million7years Binary Stock Strategy Selector 🙂 is designed to STOP you from wasting YOUR precious time and money chasing funds, managers, the market, etc …
… and, concentrate on building YOUR core skills (e.g. your profession; your business; your talents; etc.) and maximising YOUR return from THOSE.
This is not just me saying this; it’s Warren Buffett as well … but, we’re just two conservative rich guys (one ultra … Hint: his initials are WB … the other so/so) … what do we know 😉
But, here’s where I differ from Warren: IF your core skill is ‘speculating’ [AJC: and, this might be you, Moom?] … then, go for it … but, treat it as your BUSINESS …
…. and make sure you invest the proceeds in one of the other, safer ways available, just in case you ever get it wrong!