In our experience, people who invest tend not to follow their money as thoroughly as they should. Often times we take the advice of stock brokers and bankers as the definitive word in how to invest never once following up on their advise. We assume that they know more than we do, and have our best interests at heart which is often times not the case.  Bankers and stock brokers look out for what is not only in your interest, but theirs as well. Sometimes that falls inline with your goals and sometimes it doesn’t. You know you need to invest but if you do not take the time to discover how your money is invested and the criteria the broker is using to invest your money you open yourself up to more risk. I am not suggesting that bankers will deliberately work against you, but they are trained to suggest investments that will make more money for the banks and that money has to come from your share.

Stock brokers and bankers will pitch you the new “in” product on the market and those that follow the current corporate philosophies. Typically they will advise you to purchase a mutual fund that is performing well, or some obscure stock that has taken off.  Often times these investments will make you money but not the big money you were promised.

Banks and brokers suggest that you need to look at the long game, suggesting that your money may not be performing now, but in the long run you will be much better off. Now I agree with the long game. In fact my total investment strategy is built upon the long view. My bank told me as of 2013 that the economy hasn’t recovered yet, and that is why my mutual funds were down. Not just down in some cases but less than 40% of the original value. When I decided to look at this more closely I discovered that the Dow Jones was at record high levels. So why was it that my investments were still floundering? It is an interesting question.

The goal of my stock secret is not to tell you how to invest your money but rather help you with your decision making process. We are not licenced to provide buying advise, nor do we offer any stock buying advise. We only offer suggestions on how to take control of your investments.

Our secret is not what you expect as it is basically what you have heard all of your life but maybe haven’t put much thought into it.

My investment strategy is not to get rich quick but to become wealthy over time using the safest methods possible. There is a big difference between the two. Get rich quick schemes do happen, but most times people who follow this investment strategy end up losing everything by making poor decisions hoping to strike it rich in one great investment.  Honestly for every good decision an investor makes using this high risk strategy there are hundreds of poor ones made. It just isn’t worth it.

If you follow my guidelines, and develop a few more of your own using a similar thought process, you will see your money grow at an exponential rate.

Generally speaking. The market always grows, it is subject to fluctuations sure, but look at the market as a whole is always growing. Using this theory investing in the stock market is a good thing. If you want to make a decent return, you need to be in the market and not sitting on the sidelines. What is more, following solid rules, you can outperform the market so no matter what happens, making smart decisions will allow you to keep you money safe and growing.

The market is only dangerous if you do not do your research and proceed with no knowledge or the use of “gut” feelings. Researching a stock before you buy will prevent you from making poor decisions. Do not fall for the hype of a “new” stock on the market. Often times they do not perform as expected. See Facebook for example. Before doing research on stocks to purchase you need to develop some rules as to how you are going to make your buying decisions. I will let you know mine a little later on. While doing your research adhere to these rules that you develop to help prevent you from making that poor decision. We will outline some stock buying rules that we have developed. We will also show you some tools we use to make our stock buying decisions.

The money you save needs to be working for you. A savings account does not have the earning potential of the stock market. Is it safer? Sure, but the growth potential is limited. Do you think Warren Buffett or Donald Trump rely on a savings account? The rich stay rich by making their money earn more money and by saving more than they spend. It is a simple concept but one that needs repeating.

The longer your money is in the market, the more you will earn. Simplistic but true. If you have a $1000 in the market for 30 years and a $1000 in the market for 1 year, which one will be worth more? This is assuming that you have followed the investment rules of course.

Here are some basic rules that I use when investing. I have found that these rules keep me from making poor decisions. Use as many of these rules as you see fit but keep in mind the rules shown here have been developed to make money over the long run. I want to protect my money once I invest it as much as I can.

Invest in as many different market sectors as you can afford. Do not put all of your resources into one stock. The market will fluctuate so being diversified will allow you some stability as it is very rare when all sectors are down at the same time.

Companies I invest in need to meet the following criteria.

Buy a stock to hold it. Do not buy  a stock to flip based on a market hunch. Pick companies you know are strong and will be able to survive a down trend.

1. Business has been on the stock exchange for more than 30 years
2. Always pay dividends
3. Dividend percentage never decreases.
4. Dividend is realistic. Too high a dividend cannot be sustainable by the business and usually signals something troubling. Too low and it isn’t worth investing in. I like a price to earnings around 10-20.
5. Business cannot be managed by one man or private owner and needs to be run by a board. When a company is managed by a group, better decisions are often made as they are beholden to the share holders.
6. Business must be a major market player in their market. If I have a choice between a 500 million dollar company and 150 billion dollar company, I will almost always take the larger company. Obviously I will bend this rule if my research shows something extraordinary in the smaller company.
7. Business debt must be manageable and long term debt must not be excessive.  Short term debt is usually okay but long term debt can be a bad signal. Debt by itself isn’t always bad, but further research is needed as to what the debt is. It could be an acquisition of a major competitor which could be a signal of a larger market share therefore being a good debt.
8. Business needs to be international. Businesses that have expanded past one country and even better past one continent are more likely to be successful in bad times than ones who are not.

These are the basics. I will follow up with some more advanced rules and goals as time permits.