Finding the Wrong Investments

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Finding the wrong investments
Problem: There are thousands of investments from which to choose. How do I know how to pick a good investment?
Fear of individual investors and big-time players
We hope to get into an investment that will perform well, only to have it turn into a dog, or go in the opposite direction.
Some investors don’t care about the investment itself and only focus on price action in stocks such as Apple, Amazon, Google, and Tesla which trade millions of shares each day.
Price movement leads to more price movement.
Some invest in companies they believe in but then things go wrong which leads to disappointment in the investment or the company.
There are thousands of stocks, mutual funds and ETFs as well as bonds, futures, FOREX, cryptocurrencies, and others.
How do you know which one to choose?
Solution: Consider Index Investing
Indexes make the choice for you since indices can do pretty much anything we need it to do. Stocks are already chosen which avoids spending hours trying to find a good stock. This is not for all investors but can play a critical role in an overall portfolio.
The Dow Jones Industrial Average (The Dow) DJX. Most famous and oldest index made up of 30 stocks. It is the benchmark that is used to determine of the stock market is up or down.
The S&P 500 SPX. A broader spectrum with over 500 stocks. Some famous and some are not well-known.
The NASDAQ 100 NDX. In the US there are two main exchanges, the New York Stock Exchange (NYSE) and the NASDAQ. The NDX is the 100 biggest stocks in the NASDAQ.
The NASDAQ allows for advancements in technology as opposed to old systems such as open outcry and auction systems used on the NYSE. Usually stocks with four letters for symbols.
Solution: Diversification
Money can be used to buy one stock or put in an index which has many stocks which spreads investments across an array of stocks.
Don't put all your eggs in one basket. Have more investments in many different places.
Indexes balance out stocks in which most go down but others go up. There is always a bull market somewhere.
Spread out investments over different time-frames
Mix and match between multiple time frames. Short-term (days to weeks) Intermediate-term (weeks to months, swing trading) and long-term (months, years, decades, generations). I don’t do, teach, or condone Day-Trading, although it serves a necessary role.
Problem: Every time I get in to an investment, I lose money.
We are not the center of the universe. We don’t have that much control. It’s not all about us. Investing and trading can be frustrating so any investors turn over decisions to others or do nothing.
Solution: Technical Analysis (Charts)
Assist in assessing current conditions and timing.
A skill is developed that can yield powerful results if implemented the right way.