Written by Ronald Lang, Principal – Atlas Wealth Management, LLC
Articles on Building Wealth for you, your family and your business. We use both a macro and micro view of the markets to create the ideal portfolio. We have both a Suitability and Fiduciary duty towards our clientele.
- Filter out the noise – Business TV programs throughout the day maybe have 5% of news worth listening to, the rest is filler. Newspaper, magazine publications and Web Sites may have hidden conflicts that you may not be aware of. You need to be well aware of what you are reading and by whom.
- Look for stocks at wholesale price levels, not retail levels where premiums eat away at your returns. If an equity price is too expensive, there will always be another investment, don’t chase price. Try a blended approach of fundamentals and technical’s to find the “right” price range to fill your position (or scale into it). We use a handful of factors to determine entry points. Fundamentally; Sector/Industry, P/E, PEG, Book Value, Debt Ratio. Technically; 50 Day and 200 Day Moving Average, price consolidation where there were buyers and sellers in the past.
- Diversify your portfolio. You’ve heard this before. Even if you’re in your 20’s or 30’s, you should still consider 30%-40%+ in income-generating equities (stocks, ETFs) and reinvest dividends to compound your investments over time. This will help smooth out the swings in your portfolio when the market volatility takes over. Passive Portfolio Management is allocating your investments into key components, reinvesting your dividends and making consistent contributions to your portfolio over time, but you don’t make a lot of investment modifications. Consider “Active Portfolio Management” where the core passive portfolio management takes place while effective market timing and sector rotation is used to maximize returns and also provide portfolio protection. For more advanced investors, consider Option Covered Call Writing to increase your returns and help with portfolio hedging.
- Don’t Trade Your Account. This means you! Historically, it has been proven that if investor’s consistently trade their accounts will lose money over time. There is a difference between trading and investing. Investing is something that you may hold for one or more years. Investing is something that has long-range plans to hit financial goals. Trading is typically short-term and the big investment banks and market-makers are licking their chops waiting for you and your money. If you are going to trade, make a donation to your local casino, less hassle and heartache.
- Educate yourself before you invest. Your money is more personal and emotional to you than almost anything in your life. Would you buy a house or car based upon the picture in a newspaper, magazine or the Internet? Of course not. You would do plenty of research, find out its true “value”, is the “price right” and what is this investment going to yield you over 3, 5 or more years. Fools invest blindly. Don’t act on hot tips from friends, they usually don’t end up making you money. Find people you respect that have a track record and can explain why an investment makes sense for you (suitability) and how long should you be looking to hold the investment (price targets). Understand the size of your portfolio or allocated portion this investment will own and how much you are willing to lose, this is most important. Your Risk Management on all investments is the difference between making money over the long haul versus dwelling on short-term profits and losses.
Investing the right way can provide you the financial support you are looking for when you are ready to retire. You may have other ideas on investing, but these “5 Simple Tips to Investing” can be done by anybody willing to put in the time. Even if you have an experience Investment Advisor managing your portfolio, you should still understand how your money is being invested and when appropriate, ask questions or even offer ideas when you find something that is meaningful to you. Too many investors are trying to beat the market or trying to reach a financial goal in a shorter period of time that may be putting their principal at-risk. This is not the right way to invest. Follow the rules and you will do well with patience.
About the Author
Ronald Lang is the Principal at Atlas Wealth Management, LLC focused on working with clients to meet and exceed their financial goals through suitability and fiduciary requirements of their clients. Mr. Lang writes several articles on wealth management to educate and provide valuable information to both clients and non-clients. He is a frequent content contributor to the financial publication Investor’s Business Daily (IBD – www.investors.com) He believes that financial education is one of the most important skills you can have in life, but very few people pay attention to it until it’s too late. Mr. Lang also does several speaking events and volunteers his time to youth sports.
You may contact him at Ron.Lang@AtlasBuildsWealth.com or (888)403-9400.
