How To Invest, Part 7: Defining Bull and Bear

(credit: OTA Photos via Flickr)

(credit: OTA Photos via Flickr)

In a recent blog entry I discussed the importance of researching a stock before you buy it. Today I talk about researching the market before you enter it so that you can better define its personality — and yours.

Please note that I’m not suggesting that one market — “bear” or “bull” — is better than another or that we should enter a market at any particular time. Popular notion states that any time is the right time to invest in the stock market.

It’s just that which stocks we buy or how we buy those stocks might change depending on the kind of market it is at any one time.

I’m suggesting that whenever you decide to begin investing in the stock market, you should find out what kind of market it currently is, where it is in that market cycle, and what we can expect from it in the future.

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Saving Money is Hard… But Setting Goals Helps

(credit: Paxson Woelber via Flickr)

(credit: Paxson Woelber via Flickr)

In my last entry I offered ways to save money. In this entry I want to acknowledge how hard saving money is. SAVING MONEY IS NOT EASY, but if you want abundance in your life, you have to do it.

But “no ifs, ands, or buts,” saving money is hard work. Of course, lots of things worth having in life are hard work.

If you want a great physical body, you have to work hard at exercising. If you want a high-paying job, you have to work hard at school. If you want to progress in your career, you have to work hard at your job. Hard work takes motivation and discipline and conscious focus.

The good news is that once motivation, discipline, and conscious focus is learned in one area of life, the skills easily transport to other areas.

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How To Save Money… The Real Way

(credit: Andrés Nieto Porras via Flickr)

(credit: Andrés Nieto Porras via Flickr)

I was out on Yahoo the other day and came across an article offering me seven ways to save money. Since I like saving money, I gave it a quick read.

To me, the suggestions… left something to be desired.

The article suggested I wear very high heels when I go shopping — to tire me out quicker — and/or drink four or five glasses of water and then not go to the toilet before going shopping.

I think the idea was that if my bladder is full, I’d shop less.

There were five more similar suggestions to how I might save money. Now these ideas may be brilliant, and you may want to try them, but I think I’ll probably pass.

Maybe a better way to save money… is not to go shopping at all!

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How I Invest, Part 6: Beware of Research

(Credit: Ivy Dawned via Flickr)

(Credit: Ivy Dawned via Flickr)

In previous entries I discussed the importance of researching a stock before you buy it. Research, of course, doesn’t stop when you purchase a stock. It’s an ongoing activity.

As the world changes, so does the stock market and so do individual stocks and the companies they represent. As an investor, it’s imperative that we know what’s going on in a company when it’s happening and assess how those activities are going to affect the stock price.

A golden boy stock of one year may be a huge failure the next. BlackBerry (BBRY) comes to mind. Once a favorite in my portfolio, today it’s still alive as a company, but just barely. I sold the stock I owned years ago.

First Solar (FSLR) is another example. It’s stock price was over a $160 a share in February 2011, then fell to as low as $15 in July 2012. Had I had a magic ball I might have realized that was the perfect time to buy again. I didn’t. Today, the stock is hovering around $70 a share.

So why is this blog titled “Beware of Research?”

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How I Invest, Part 5: Avoid Emotional Decisions

(credit: YoTuT via Flickr)

(credit: YoTuT via Flickr)

All through my investing career, from the early days when I had good advice and lots of support, up until now — when I’m basically working on my own — I’ve made lots of mistakes.

Most of my mistakes are a direct result of my emotions taking over my reason — although at the time it feels like I’m protecting myself. Let me explain.

Part of my problem could be that I’ve never clearly defined what kind of an investor I am. If asked, I’d say that I’m a long-term investor — in it for the long haul. I pick a stock to buy believing that the company I choose to invest in has good growth potential, a steady pipeline of new products, an excellent financial base, and good management.

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