Success in investing requires both persistence and trust. Despite a history of occasional recessions and drops in the stock market, the long-term, overlying trend of the stock market has been upwards.
Applying answers to the basic questions of what, when, where, why, how and who will allow you to grow your retirement account safely and/or to build your everyday investment portfolio without fear of losing all your money.
6 elements of successful investing include:
Who – This is you or your family. If you take control of your future, your financial future, like you do when driving a car, you can move your finances forward. Investing is just like putting your car in drive, you may have to change lanes, stop at red lights, or even have to change cars, but you eventually reach your destination, and in investing you can reach your financial destination too.
Why – This is simple. If you are to protect and grow your retirement or regular investment accounts safely and profitably, you need to take some action to ensure your money is safely invested and that it will grow. If your money doesn’t grow, it slowly shrinks in value because inflation makes each dollar worth less tomorrow than it is worth today. Just staying even with inflation means you are not really building or enhancing your financial future or your ability to enjoy retirement without the headache of wondering how you are going to able to eat or pay your bills.
When – is about finding the right time to take action. If our last recession scared you and you have your money safely tucked away so you won’t lose more than you already have, then you are losing money right now. You need to monitor your portfolio with a personal investment software program that will tell you when to buy back into the markets after a down turn. “When” also applies to the right time to sell your positions because they are stagnant or declining, and or “When” to buy a new mutual fund, stock, or ETF that is going up or has the potential to climb and help you reach your financial goals.
Where – is about where you put your money for your future needs. This involves a number of factors:
- Do you choose a mutual fund, or an ETF, or a stock or do you invest in some of each?
- Do you have a retirement account or a regular wealth-building account? Maybe you have both?
- Is your money, or are your investments in your own hands or in someone else’s control?
What – this is similar to ‘Where’, but from a slightly different perspective. The ‘what’s’ are:
- Exactly what stocks, ETFs, or mutual funds you are going to invest in to reach your goals.
- What investment software you are going to use to get your ETF, stock, of mutual fund buy/sell recommendations?
- What personal investment software or technique are you going to use to tell you when to exit the markets and when to start investing again?
How – is about putting “When”, “Where”, and “What” together. When you do put when, where, and what together as a team great results will occur and a strong investing defense will prevent major losses.
If your “How” uses a personal investment software program based on relative strength investing by using alpha analysis or relative strength momentum (RSM) analysis (among others) you can get winning recommendations regardless of market conditions.
If your “How” includes a market exit signal, then you can invest safely and profitably confident that when the markets drops you will be signaled to pullout of the market protecting your money until the markets rise again.
The “How” is also going to tell you which investments to choose and when, as long as your “How” involves a comprehensive look at your investment choices. In other words, you are not limited to just stocks, just ETFs or just mutual funds. “How” is also going to take into consideration just how much time you have to manage your portfolio accounts, so that you can take control of your financial future.
Dominick is the designer of the investment program Dynamic Investor Pro, an investment software used by individual investors and professional investment advisors for stocks, ETFs or mutual funds.