The Bull Hunters Guide

Welcome back. Today marks the end of our blog series on Asset Allocation. Hopefully, you’ve learned a number of vital skills that will help you in establishing a functional and profitable investment portfolio.

If nothing else, you should have realised the profundity of the principle that no investment exists solely in a vacuum. Rather, each one has to be considered in conjunction with the investments that support it or hinder it.

When a portfolio is assembled such that all of the investments support and advance one another, you have a strong portfolio that will see you into the future with great success.

If, however, your investments are not properly allocated, they will work against each other and bring one another down, resulting in a legacy of long term losses for your investment portfolio.

Asset Allocation Overview

Let’s briefly review on what we’ve covered so far during this Asset Allocation series. First of all we established the importance of analysing the risks versus the return for any type of investment that you intend to make. A proper assortment of high risk ventures next to stable investments will ensure that you always have a buffer of income protecting you.

Further, it pays to question the validity of the analysts at times. Never rely one a single method of analysis; they should be just as diverse as your investments.

Next up, you should invest with both your long term and your short term goals in mind. These goals should match up with your investment decisions accordingly.

Starting early is one of the best things you can do. The earlier in life you start assembling a portfolio, the more time you’ll have to develop a truly diverse assortment of investments that will serve you well in any situation.

Lastly, don’t just speculate. If you have a new idea for how to arrange your portfolio so that it will be better allocated, act upon it! You’ll never know how well something will work unless you experiment now and then.

That about covers it, I hope you have enjoyed the Asset Allocation series. Join us next week, when we start a new series on investing in gold.

Until then, happy trading!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

Social Bookmarks:

Welcome back once again to the Asset Allocation series. In this entry, we’re going to keep looking at different ways to diversify your investment portfolio to make sure that it can stand up to whatever the future might hold.

Remember, the more diverse your investments, the more likely you are to be able to survive sudden changes in the economy; even disastrous events like the collapse of an entire industry!

Start Investing Early On

Another key to being able to survive those disastrous events is our tip for this entry: start investing in your portfolio as early as you can. The sooner you begin to invest money, the more you stand to benefit from it. That much is obvious. However, this has some other unforeseen benefits that should be mentioned.

First of all, if you invest early, you’ll stand to make a great deal more off of the compounding interest that is hopefully associated with your safe long term investments. As a result, you’re going the most value possible out of your money, in addition to just simply having the opportunity to invest more of it in the first place.

Time Can Heal Wounds

Secondly, there is the matter that, the longer a span of time you invest over, the smaller each individual year will seem in the scope of things. If you only build up your investment portfolio for a total of five years, and two of those years are quite bad, you might well said that you had a fairly bad run of things overall. Those two years might represent a critical setback and the difference between a hard retirement and a luxurious one.

However, if you had been investing for a full thirty years, those two years wouldn’t seem anywhere near as significant. In fact, if they were bolstered by 28 excellent years of successful investment, you probably wouldn’t remember them at all by the time you reached retirement age.

See you next week for part 6 of Asset Allocation.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

Social Bookmarks:

Welcome back to our ongoing discussion of some of the most common mistakes that investors tend to make when Stock Market Investing. If you missed it, be sure to take a look at stock market investing mistakes Part 4.

These aren’t the usual obvious errors that you might have heard of, but they still hold disastrous consequences, so it pays to educate yourself about them and to diligently avoid them.

Predicting Spikes And Lulls

There’s hardly an industry out there that doesn’t fluctuate at least some with the seasons. Everyone knows that retailers, for instance, tend to see a major spike around the Christmas season, and then a lull immediately following that, in the spring.

The same can be said of many other businesses, and the better you’re able to predict when these kinds of lulls and spikes will happen, the better your investment decisions will end up being.

Also note that the decisions made by the federal reserve in regards to setting interest rates tends to directly coincide with the fluctuating seasonal movements of the country’s industries. So, that’s even more incentive to keep this in mind when you’re looking for a company to invest in.

Research 5 Year Data

The best thing you can do to educate yourself about an industry or company’s typical schedule of spikes and lulls is to look at a monthly five year record of the company’s performance. You should see some semblance of a pattern emerging from the shifting data, and from that it ought to be quite easy to extrapolate the knowledge of when it would be best to invest in this company (if at all).

This concept is incredibly important to making wise investment decisions, because the movements of the market and the federal reserve will nearly always outshine any other consideration that can be made about an investment.

In other words, even if everything else looks great, and a company is still being traded at a high volume with a lot of excitement, you can’t count on it unless the seasonal history indicates that you can.

See you next week for part 6 of Stock Market Investing mistakes.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

Social Bookmarks:

Recently we’ve started a new series taking a look at some of the worst blunders you can commit when dealing with Stock Market Investing. Be sure to check out last weeks edition of stock market investing mistakes part 2.

These are issues that aren’t quite so obvious, and which a lot of otherwise intelligent investors seem to commit over and over again. Therefore, it pays to know about them so that you can be careful to avoid them in your own career.

The Importance Of Macroeconomics

This time around, we’re going to talk about the importance of macroeconomics. As most of you know by now, macroeconomics refers to the viewpoint which encompasses the entire scope of the country’s economy all at once, instead of focusing in on anything in great detail. In other words, it’s taking a very broad view of the market as a whole, with all of its many forces at play.

We mentioned earlier the importance of qualitative analysis of stocks that you planned on investing in, but that still isn’t quite enough. Indeed, a stock might look totally excellent from both a quantitative and a qualitative point of view.

Everything might be laid out and ready for you to come out making tons of profit on your investments. And still, you might lose money on what seemed like a sure thing.

What happened? You failed to take the macroeconomic viewpoint into perspective. If a company were about to release a ton of new products that seemed sure to be a hit, and if they had solid strategies to carry them into the next decade, normally you’d want to invest right away, right?

But what about if the market is such that there are about to be a lot of layoffs? Or trade issues that will begin to interfere with the manufacture of those products? In that case, the investment is as good as dead.

If you pay attention to the wide, macroeconomic view at all times, you’ll never be taken by surprise like this.

See you next week for part 4 of Stock Market Investing mistakes.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

Social Bookmarks:

Hello again. Last time in this blog, we began a new series on the seven worst stock market investing mistakes that you can make when investing.

Now that you’re sufficiently armed with a great deal of knowledge about the markets and Investing in general, you need to know how to safely employ that knowledge. Knowing about these common blunders should help you to avoid some costly mistakes.

Investing Too Early

The mistake we’re going to talk about today is Investing too early in a falling stock. It’s very often the case that when the price of a stock plummets, you’ll see some intrepid investors buying it up with the rationale that it has nowhere to go but up. Sometimes they’re right. But sometimes, they’re horribly wrong!

Stocks of this type are often called “falling knife” stocks because it’s similar to what happens when you drop a knife. Your reflexes sometimes cause you to reach out and grab the falling knife before your common sense can tell you otherwise, and as a result, you get injured.

The problem here is that when the news of a plummeted stock first breaks, not all the damage is yet done. Many times it will happen that when other investors hear the news, they’ll quickly grow upset and sell off their own stock, resulting in the stock plummeting even further. If you had already bought into it, you’d be quite upset.

Strike When The Time Is Right

Instead, exercise some patience when a stock plummets. If you invest too early, you’re only cutting into your potential to make money, so learn to judge exactly when the stock has truly hit “bottom”. This is done by learning to comprehend something called the “selling pressure” of a stock.

You have to observe not just the activity and price of the stock, but also the rate at which shares are being sold, and how quickly the price is dropping. Don’t jump in while the rate it still high; when it’s truly bottomed out, the rate of sell will taper off, and then is the time to strike with your Investing.

See you next week for part 3 of Stock Market Investing mistakes.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

Social Bookmarks: