We’ve covered a lot of investment tips in this blog so far, and the majority of them have dealt with the idea that you shouldn’t be motivated into making sweeping changes to your portfolio or overall investment strategy as the result of panic. In other words, we’ve stressed weathering the storm, because this is one of the most important lessons that a beginning investor can learn to set his or herself apart from the total amateurs. Today, however, we’re going to shift gears a little bit and start dealing with that part of the stock market that tends to get everyone excited: the fast-paced fluctuation.
Buy and hold forever?
We’re going to bust a piece of conventional wisdom right now. It used to be the case that there were certain stocks out there that one could buy and hold forever. So called blue chip investments that would continue to grow and grow throughout the life of the investor, providing a constant return and a continuous source of reliable growth. However, those were simpler times.
Changes to the marketplace
Nowadays, industries are much more competitive and there are many more fish in the sea. The internet represents a whole new arena upon which corporations do battle, and it has so far proven to be one that can change the face of the entire market in both positive and negative ways. It’s a different world, and it’s one that’s in constant shift. New technologies come and go (or come and stay) with a much greater frequency than they used to, and the old adages just simply don’t hold. Even the best investment can wither over time, and even if it doesn’t totally turn over and start producing losses for you, it could very well be the case that your money would easily be producing better results elsewhere.
Watch your investments
As such, always watch all your investments. Don’t take some for granted and just assume they’re doing well because they’re your “safe” ones. Actually look and analyze, all the time. Staying on top of the game and know how each stock you own is moving at any given time is the line that separates the uncertain, hesitant investor from the confident, successful one.
See you next week for part 7 of Basic Investment Strategies.
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2008
{ 5 comments… read them below or add one }
Good Blog. I will continue reading it in the future. Nice layout too.
Aaron Wakling
Super blog full of good stock market information.
JJ
Yep, gotta watch them bear markets.
Hi Sean,
Well, you’ve just answered one question I had. I didn’t know they were called blue chip stocks but I wondered if you could buy and hold stocks for a long period and they would increase in value. Now I know.
It makes complete sense to evaluate all your stocks regularly so you know whether or not they’re performing.
Good advice once again
Shares that we hold are investments and are a valuable assets. Just as we look after our investment properties or online businesses, we need to keep an eye on the performance of our shares.