Staying in Touch with the Economy and Your Investments

“Stay on your toes,” my old baseball coach used to tell us. To win a nine-inning game even the seemingly inactive outfielders need to stay alert on every pitch, on every throw to check the runner. So it is with long term investing. You need to stay alert, stay awake, and stay in touch with your investments.

Please pardon the baseball example but it is instructive. Long term investing is a nine-inning game or maybe it is the entire season. In a baseball game the pitcher and catcher are constantly active and those outfielders just seem to stand around. However, a good outfield is awake, alert, and ready to move at a moment’s notice. That is what the long-term investor needs to emulate.

There are those who say that, for anyone who has another job besides being an investor, five stocks is the limit. The point is that your stock homework will take time. Reading quarterly reports, thoroughly, takes time. Doing the homework to maintain a perspective on the economy as it relates to your holdings takes time.

Like an inactive outfielder the long-term investor can let his or her stock homework slide, skip the quarterly reports, and ignore the indicators in the economy that will help anticipate a market move. The long term investor who does not stay up with the homework of following the economy, reading the quarterly reports, and staying in touch with the market will be the outfield who never makes the great play that wins the game.

Today, especially, the stock market is on the move. However, in this recovery there will be big winners and there will be the losers who will never come out of the damage that the recession did to the economy.

Reading quarterly reports, doing your stock homework is drudgery. But, it is your money. As the economy improves you can prosper.

We have talked about which parts of the market, which parts of the economy will benefit from stimulus money, a preference for green energy. Following through, weekly, on your homework will help you capitalize on these opportunities.

Anticipating whose quarterly report will look worse as the economy changes will allow you to leave a stock before it dies a lingering death.

A long-term game plan is necessary for long term investing. However, the long-term game plan needs short-term action. The minimum is reading and studying quarterly and year-end reports. Then you need to read what experts say about your stock. Then you need to reread the reports and make up your own mind. Sounds like homework right? It is staying on your toes.

As anticipated companies selling consumer goods are weathering the recession. Look at their quarterly reports and things look great. Look at the economy as it starts to recover and realize that in a year or so other stocks will outperform the stalwarts. Look at your long-term game plan and do a little homework now. What other options do you have with that money in short-term treasuries or one of the old consumer goods stalwarts? And, if you are going to move you money, when will you do it?

Keep up with the economy as it changes. Do you homework every week. Read the quarterly reports.

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