Jack was desperately looking for a stock market investing guide. He was desperate because he saw all his friends around him earning more money in the stock market than that he could save from his normal salary. Jack was focusing on his job and his family. He had no time to spend on researching stocks and investments.
This is good. It is 6.30 am on a Thursday morning. The sun is just rising and I’m thinking about my new project: writing “The Investing Guide and Road to Financial Freedom”. In the mornings I do my best thinking… especially when I am walking on a quiet beach with my feet in the sea.
Chart 1: S&P 500, DAX, HSI, GOLD compared for the month of August 2011
August was a hectic month. Stock markets moved up and down like a yo-yo.
Gold went as a rocket to crash again… or that was what was said on the news.
Here are two charts that provide you with some perspective of what happened during August.
Get the benefits from a global geographical diversified portfolio of index funds
Once your stock investing portfolio is large enough, you can easily use index funds to diversify your investments over different regions in the world. Such a diversification has a few advantages that we will list below.
Here are four reasons for diversifying your stock investments geographically around the world:
Index Investing for Dummies is a very useful book about investing, both for beginners as for investors with more experience. It explains and provides the tools for a simple, straightforward and effective approach for long-term investing.
In summary, you can say that it advocates buy and hold investing with low cost ETFs and Mutual Funds that follow well defined stock market indices.
The biggest loss I ever made on a single investment was the investment in the stock of a company that I knew best. This is a great lesson for beginners who want to start investing. It was in 2000 and I bought shares in the company that I was working for. I know that company inside out. I know its industry. I know the competitors. It was and is the dominant global market leader in its market. And still I lost more than 60% of my investments in that company.
Every month, Stock Trend Investing is publishing here one of its history charts for trend investing and trading. This month, this is the history chart for the S&P 500 index.