Whether it’s 2011, 2012 or 2020 – here’s a good investment strategy for making money by investing without a crystal ball. Every good investment plan takes into account both the choice of investment and the time. If you can’t make money by investing using this simple strategy, rest assured that only the rare and lucky will make money.
Before you point out how to put together a good investment strategy for 2011 and move forward, ask yourself an obvious question. Where do the most successful people invest (or where have they had it in the past) to make money in the long run? The answer before the financial crisis was bonds, stocks and real estate. Today, the answer for the average investor is the same and takes the simple form of bond funds, equity funds and real estate equity funds. Ultimately, if all three of these areas of investment are filled – we are probably depressed and only a few lucky or smart speculators will make money on the investment.
A good investment strategy does not rely on speculation or an attempt to time the market. No matter what you hear, no one has proven and consistent results in determining market times that far outperform markets in the long run. If they did, they would make a ton of money by investing and hiding their secrets, not sharing them. Well, why not settle for a good investment strategy that makes only one major assumption: that the U.S. will grow and prosper in the long run?
Investing money in the above three areas is easy with the help of mutual funds. To reduce risk and add flexibility to your investment strategy, add a fourth type of fund called a money market fund. At today’s interest rates this may not look good as an investment, but they are safe and earn the interest rates that follow current rates. Specifically, by owning only 4 different funds, you can put together a good investment strategy for 2011 and beyond and make money by investing in America’s future. From high security to greater risk and greater profit potential: a money market, a medium-term bond, a capital income with large capital, and a real estate equity fund are all you need to own.
A good investment strategy for wetting your feet is simply investing equal money in all 4 funds. The timing strategy does not require reference to judgment or guesswork. A year later and once a year thereafter, you simply move the money to equalize all 4 funds again in value. This automatically forces you to take money off the table from your better-performing funds – and transfer more money to those who haven’t either. The net result over time is that you buy more stocks when prices fall, you sell stocks that are relatively expensive.
This is also a good way to make money in the long run, while keeping the risk at bay. Simply buying and holding funds is not a good investment strategy, and many average investors have been put in trouble in the past. For example, real estate funds were good investments for several years until the financial crisis hit them. If you owned them and just held on, by 2009 you could have accumulated a significant amount of money there and taken risks … which would have resulted in huge losses as a result of the financial crisis.
More than simplicity is included in what I call a good investment strategy for 2011 and beyond. This strategy uses two single proven tools in the investment business: BALANCE & REBALANCE and DOLLAR COST AVERAGE. The first tool keeps you on track while covering risk, and the second is a tool that reduces average investment costs by buying more stocks when prices are lower and less when they are high.
By owning only 4 different mutual funds you can put a good investment strategy with only moderate risk. People make money in the long run by investing in bonds, stocks and real estate; and keep smart money in a safe investment for flexibility. In years past, some people were simply lucky and made money by investing without a strategy. With a good investment strategy you will not need to cross your fingers and rely on luck. If America is advancing in 2011 and beyond – so should you.