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Investing is complicated for many people. The fact that no one knows what the market is going to do overnight enables many so-called experts to give their opinion on where the market is headed. Just search for the term “investment strategies” and you will find over 10 million results. Yes, 10 million.
So it’s no wonder why when investing, most people choose to do nothing instead of doing something. The classic “analysis paralysis” comes into play. The question is how can you make investing easy? Below is how I invest. My approach is pretty simple.
I don’t watch the market every day. I don’t make that many trades in a year (in fact, if I checked, I’m sure the number would be under 20). I’m not trying to find the “next big thing” either. I don’t care about anything.
Why I don’t analyze the stock market
Why i don’t care I have two reasons:
- I don’t want to spend my free time analyzing investments
- If you look back at the beginning of this article, I have no idea where the market is going tomorrow
Let’s take a closer look at each of these points. First, I value my time. I like to play golf and ride a mountain bike. I enjoy spending time with my friends and family. If I spent every weekend researching stocks, I would have less time doing the things I love to do. Plus, my performance is doing well with the way I invest (more on that later).
Next comes the problem of not knowing where the market is going. Why should I spend my free time researching stocks I want to invest in when there is a 50/50 chance tomorrow the market will rise?
Simple steps to investment success
That’s how I invest and keep things simple. First, I choose inexpensive investments. I am a firm believer in passive investing. I don’t pay a professional fund manager money if he or she can’t consistently beat the market every year. I just take what the market offers me.
Next, I invest money in the market every month regardless of whether the market is trending up, down, or sideways. For me it does not matter. I invest for the long term, so I don’t care about the daily fluctuations. Though I get excited when the market falls and I can buy more stocks.
After all, as already mentioned, I will remain invested in the long term. This is important to be a successful investor. If you want to make money in the short term, you shouldn’t be on the stock market. It’s too volatile in the short term. But the long term at hand is a different story. In the long term, the stock market is trending up. If you want to make money in the long term, the stock market is for you.
Final thoughts
Overall, investing is easy. All you need to know is that you are ignoring all of the advice you hear every day regarding investing. All of this conflicting advice makes many people think that investing is too complicated. It really isn’t. Breaking it down into a few simple, vital steps will help you invest.
I have used this method of investing for the past 16 years. This includes 2 wars, 2 recessions and the bursting of a big bubble. I started out with $ 20 a paycheck in a 401k. Since then, I’ve added a few other accounts and now I’m joining a million dollars. How did i do it By keeping an eye on things and thinking long-term when it comes to investments.