Wealth Builders! The Market is Going on Sale!

Wealth Builders! The Market is Going on Sale!

Have you been looking for a good time to make some investments? Maybe you did your taxes early and you want to do something more worthwhile with your return than spend it on a new car, new clothes or whatever else you’re thinking of doing.

As a Personal Coach, and someone who is very active in the markets, right now is a great time to get in.

Heath, I Don’t Know Much About Investing!

Now I’m sure the majority of you probably have minimal experience with this but that’s okay, most people don’t. Most people hire a brokerage to manage their funds in a 401k or have a broker tell you what is best for you to do.

Here’s the catch with that….Brokers don’t have any financial responsibility to you by law. They typically are told to suggest “safe” investments like bonds, CD’s and other safe equivalents. They hype you up on the investment by stating it’s “safe”, it yields 3-5% a year which is better than a savings account and they know what they’re doing so they can do it better than you.

However, what they don’t highlight is the astronomical fees that are associated with these investment vehicles, especially when you cash out. At the end of the day you come out with a very minimal return that you could’ve seen much more from if you actively managed these yourself or hired a “feduciary” to do it for you (more on fiduciaries in a minute). The goal of a Broker is to make as much money for the FIRM as possible, not necessary you.

Quite frankly, it’s really not that hard to start investing on your own, it’s all about becoming familiar with the lingo and what has historically performed best throughout decades.

Most any well researched investment into the market is usually going to provide a better return than your typical savings account so some investing is better than none.

So What Do I Do?

Now before I give any advice, let it be known that I am not a licensed security broker or advisor. I’m a Success Coach who specializes in helping people build wealth and financial freedom using many different vehicles. So right now I’m simply giving advice based on 7 years of experience, some very expensive schooling at THE best school for investing and have had multiple mentors that have taught me throughout the years to become very successful with it. The advice you see below is some of the same advice I give my Success Coaching clients for them to get started.

So first, let’s look at some scenarios and investment vehicles:

  1. Index ETF’s: An Index ETF is simply a “basket of stocks” that mimic the movement of a particular index like the Dow Jones Industrial Average, S&P 500, Nasdaq or the Russell 2000. ETF stands for Exchange Traded Fund. The beauty of these babies is that they give you exposure to many stocks with one transaction and more or less track the movement of the economy.

Now let me give you an example: Back when the market crashed in 2008, we went into a period of recession so the market took a beating. However, if you’re like most avid investors, you saw this as an opportunity or “the market is on a historically awesome sale”. At least that’s how I like to think of it.

Now let’s say you bought $10,000 of the Index ETF “SPY” when the market hit its lowest point at $67.10 per share. The SPY tracks the performance of the S&P 500. If you would’ve cashed out your approximate $10,000 in January of this year, when it hit it’s all time high of $229.71 per share, you would’ve seen a 342.33% return by holding it for 8 years.

That’s a 42.79% return per year if you average that out. You would be holding $34,233.00 right now. Regardless of how much you would have, the key is the average return percentage. There isn’t really anything else out there that can give consistent, huge returns like this so if you don’t have some money in an index ETF, you’re doing yourself a huge disservice.

  1. REIT’s – This stands for Real Estate Investment Trusts. Depending on which one you invest in, you can either be investing in Direct Ownership of Properties, you could be buying mortgages or other mortgage based securities, you could be investing in retail, healthcare, commercial or residential real estate.

Now let’s do a little shorter term example for this one: Let’s say you invested into $10,000 of REIT ticker “SCHH” back in October of 2011 at a low of $21.66 per share. By the time July of 2016 hit, this REIT would’ve given you, or “yielded” you, a 210.48% gain. That’s approximately 42.1% per year if you average it out and you would now have $21,048 buckaroos.

3.) Individual Companies – Now this is where it gets fun but a little trickier. Successful companies to me are like heroes or role models. Just as a child wants to be Superman for his incredible strength and powers, the same is true for successful companies to me. It’s fun to follow them, learn about their executives and owners, what their next move is going to be, what their challenges are and why they make certain decisions.

Even if you’re not an investor, you can still learn a lot about success from simply following these successful company’s moves.

Here’s the deal though, it’s not always the companies that are doing really well like Google, Netflix or Amazon that you always want to be invested in. Many of these companies are overvalued or overbought so they don’t grow very fast in the markets. Also, if you’re on a limited budget to invest with, you’re not going to be able to buy many shares as these can be expensive.

Now, I don’t want to be a hypocrite because I did make a nice chunk of profits off of Tesla, Amazon and a few other popular stocks just recently. However, I have been doing this long enough to know WHERE and WHEN to get in, to make a nice profit from them.

Now a great play, when investing in individual companies, is to watch the economic trends. What are people buying a TON of, what do people really NEED, does this company generally do well during this season, what companies are innovating fast or have created something new that you KNOW while be huge sometime in the near future?

Now there are countless amounts of investment vehicles you can use that would take way too much time to explain but I wanted to give you a little encouragement to get going. Before you do though, there are a few things to be mindful of and they’re extremely important to your success.

Market Timing

This is absolutely CRUCIAL to investing. Most people have this part backwards. They want to buy stocks, options or ETF’s when they hear good news about it but that’s the opposite of what you want to do.

What you want to do is wait until a prospective company takes a downturn. Maybe a bad earnings report came out or maybe the company is facing some fierce competition. There will always be bad news along the way for companies you invest in but that’s your opportunity to BUY BUY BUY. So doing well with investing is all about patience.

Just like retail stores buy items in bulk for cheap, mark them up and sell them back to you for profit, you want to do the same thing. You want to buy low and sell high or you can short the market if you think the company is headed for doom. That’s also a whole other conversation though. Let’s focus on the basics.

Economic Influence

Now there is a correlation between individual stocks, commodities, options, futures, currency and the economy. Obviously if pending house sales is low, that might drive the value of your REIT down. If we have any sort of bad economic news, it drives the markets down in value as a whole for the most part. So sometimes it’s not the company that is doing bad, it’s just the economy.

If you invested in Target Stock and the Consumer Spending Report comes out and shows it has been very low, Target might take a big dip because not as many people are shopping.

The list goes on and on with this but they key is to start reading or listening to the economic news like CNN Money, CNBC, Thestreet.com and of course there are tons of other outlets. The investing gurus that write or speak on these outlets usually explain how certain factors affect others. The more you listen, the more you start to pick up on it and learn the language. So I always advise people to dedicate a solid month or two to listening, reading and learning before they put any funds in the market.

How to Get Started Without Any Money

So, one thing I always advise my Personal Coaching clients to do, BEFORE they put any money into the market, is to open an Account with a Broker. I suggest TD Ameritrade as their transaction fees and commissions seem to be the lowest, their customer service is amazing and their interface is very user friendly. Not only that but they offer a TON of free courses on how to use the platform.

The best part about it is that you can trade fake money in the real markets. We call this “Paper Trading”. Most brokers will usually give you $100,000 of free “play money” so that you don’t risk losing any real money while you’re learning how to invest effectively. The incentive for them is that you get hooked on their platform so that when you do finally decide to put your money in, you choose them. Then they make money off of commissions, markup and transaction fees. Once you have the hang of it though, and you feel comfortable, then you can deposit money and get going.

Now keep in mind, they’ll usually want a minimum deposit of $1,500.00 for you to execute a real transaction. If you end up trading any other asset classes like commodities, foreign currency or futures, they’ll most likely require a substantial amount more to get going.

Investing is Fun!

The best part is it’s a fun experience. It’s always an exhilarating feeling to win so in the beginning it’s all about learning the strategies of winning the game. Now when you put your REAL money in the market it is still fun, even when you lose, because when you make a great, profitable investment, all of the research and strategy you put into it comes to fruition. It is also some of the easiest money you will ever make, for the minimal amount of effort you put in.

Investing in the Market IS NOT GAMBLING!

There are many people who think trading and investing in the market is gambling. This is as far from the truth as possible if you’re comparing it to poker, craps, blackjack or whatever you might be thinking of.

The key with trading is that you can limit your losses and you can pull out at any time. If you’re only willing to lose $10 a trade but you want to make an extra $5,000 in a month, you can do that. If your risk tolerance is higher, you can make that whatever you like. More often than not, you’ll be risking more than $10 if you’re looking for those higher payouts. However, if you want to start with a $100 trade to try and make 20-30% on it, and only risk $10 if it doesn’t go your way, that would be more probable.

People who think investing in the market, is a risky and scary place only think so because they don’t know enough about it. It’s all very calculated, not as complex as people think, and there are plenty of ways to protect yourself from loses.

If you’re looking for more information on building wealth, I am happy to give you a Free One Hour Tutorial to give you some more detail, specific to what your goals are.

Simply Click Here and you’ll be routed to an appointment booking page where you can book a screen share and Personal Coaching call with me as soon as possible. While the market is on sale, I would do so as soon as you can to get in while the gettin is good!

Best Regards,

Heath Messer

Head Personal Coach

Extract and Engage Coaching

www.extractandengagecoaching.com