Pintmaster

Before we examine the how, we need to discuss the why

There are innumerable reasons you should take responsibility for investing your money. Here are a few:

• No one else cares more about your money than you do
  Your stockbroker may do enough to keep your business, but ultimately, their goal is not to put food on your table, but to put food on theirs. With a stockbroker, you will no doubt be advised to buy a highly diversified portfolio and make trades on market information. Well… think about why they would suggest this. They make a commission when you trade. If you have a flat trade fee, or a fixed fee per trade, it is in their best interest to have you trading often.
• It takes less time than you think to manage your portfolio!
  Spending as little as an hour a day, or a few hours on the weekends, you can stay alert and educated on your stocks. Depending on how much you are looking to invest, you may want to spend more or less time analyzing the company, but my recommendation is to find someone that you trust (not a friend, colleague or relative) and use their advice. I make my decisions based on a combination of The Motley Fool and Jim Cramer’s Mad Money. I pick these two because they are almost polar opposites as far as investing strategy. We can get into deeper analysis of this in a later issue. Even at an hour a week, you are more likely to give your portfolio time than your investment advisor with 40+ clients.
• Making your own trades saves you money!
  Trading online, you have the control. Not only is it cheaper (Scottrade is $7 per trade) but things also happen immediately. There is no lead-time between when you tell your broker to sell your shares and when she does it. So its really two fold – it costs you less to execute the trade and also can save you money by being able to buy / sell a stock while it is moving and not after it has moved.
• Superior Returns
  If as an investor, you exercise discipline in your analysis, patience in your investments, and restraint on your greed, I guarantee you that you will beat your bank’s savings account, the S&P 500 and any portfolio that your run-of-the-mill personal investment advisor will put together for you.

This is just a taster of more to come… Have I got you convinced that you need to take control of your money? If not, let me know!

This entry was posted on Wednesday, November 2nd, 2005 at 10:34 pm and is filed under Investing for Beginners. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.