Chapter 3. Defining Common Approaches to Stock Investing
In This Chapter
Pairing stock strategies with investing goals
Deciding what time frame fits your investment strategy
Looking at your purpose for investing: growth versus income
Determining your investing style: conservative versus aggressive
"Investing for the long term" isn't just some perfunctory investment slogan. It's a culmination of proven stock market experience that goes back many decades. Unfortunately, investor buying and selling habits have deteriorated in recent years due to impatience. Today's investors think that short term is measured in days, intermediate term is measured in weeks, and long term is measured in months. Yeesh! It's no wonder that so many folks are complaining about lousy investment returns. Investors have lost the profitable art of patience!
What should you do? Become an investor with a time horizon greater than one year. Give your investments time to grow. Everybody dreams about emulating the success of someone like Warren Buffett, but few emulate his patience (a huge part of his investment success).
Stocks are tools you can use to build your wealth. When used wisely, for the right purpose, and in the right environment, they do a great job. But when improperly applied, they can lead to disaster. In this chapter, I show you how to choose the right types of investments based on your short- and long-term financial goals. I also show you how to decide on your purpose for investing (growth or income investing) ...
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