What do you do about actual investing. especially if you are just starting or are not a professional investor?
You can start out doing what the most experienced, even the professionals never do, and at least avoid many of the pitfalls they stumble into.
1) Do not trade securities for the basic reason: Research invariably shows that you cannot time the market. So avoid any web sites that entice you with stock trading delights.
2) Open an account with a very low cost mutual fund family of funds. (I mention the Vanguard Group(®, Inc, which operates on a cost-plus basis. But shop around.)
3) Do not make a habit of buying individual securities. The analysts who claim they know all about them know very little for two reasons. One: They are not really versed in business as the bulk could not operate a pushcart. Two: They really cannot get close enough to understand a business that even the CEO often finds difficult to comprehend.
4) If you are starting out you may want to use a minimum amount with which to invest in a corporate bond index ETF and also a minimum amount in a total market securities ETF. If you have sufficient funds do the same in an REIT ETF. In all cases, reinvest your dividends.
5) In dealing with bonds, keep your duration factor below the term of your holdings. If you will be holding the securities for more than 7 years, for example, the duration can be 7 years or less. If you will be holding the securities for more than 10 years, the duration can be 10 years, etc.
6) Avoid media noise at all times. Once you have an investment strategy in place, and you are set in your strategy, why let incessant, daily media chatter and sheer nonsense dissuade you from your original goals?
7) The only adviser you need is an accountant for taxes or a lawyer for your estate.
And see the Earl J Weinreb NewsHole® comments.
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