Simple Steps to Successful Investing

• Take advantage of 401K’s, IRAs, and other tax deferred investment vehicles
• Invest in your home
• Pay off credit card debt before any other significant investing
• Keep your investment vehicles simple

IRA’s and 401 K’s

An IRA is an account that you create with a financial institution such as a bank or stock broker. It gives you a way to save with the growth of you investment being tax free or tax deferred.

Issues such as whether you use a traditional IRA or a Roth IRA are important but the most important part is to have your investments increase in value with being taxed until you cash out.

A 401 K is similar to an IRA but it is sponsored by your employer. A common benefit is that your employer matches your contribution each year. Your money grows without being taxed over the years and is only taxed when you withdraw it during retirement when you income is less and your tax bracket is lower.

Buy Your Home instead of Renting

Interest on your home mortgage is deductible on your income tax. This law is meant to promote home ownership and economic stability. Simple steps to successful investing include owning your own home.

Pay Off Credit Card Debt

In our article featuring tips on how to start investing we mention paying off credit card debt.

Before you start putting money into stocks you need to pay off your credit cards because the interest you pay on those is more than a beginner can expect to make on his money in the market.

In fact, the interest paid on credit card debt is greater than many professional investors can reliably make year after year. The first simple step to successful investing is to pay of the credit cards.

The Minimalist Approach to Successful Investing

One of the simple steps to successful investing is to take a minimalist approach as suggested in an article by CNBC.

Life is complicated enough. The number of investment choices in a typical 401(k) plan – about 25, according to a recent report from the Investment Company Institute – is proof.
If you have a current 401(k), an individual retirement account or two, and perhaps a 401(k) from a former job, you may have money in dozens of funds. That’s not even factoring in an individual retirement account and a brokerage account.

Across these accounts, you may be duplicating where your money goes.

But do you really need to choose that many investments?

Their suggestion is to use three index funds that track US stocks, bonds, and international stocks. They also suggest a mix of taxable, tax free, and tax-deferred accounts.

Active versus Passive Investing

Over the years more and more investors have found that they are unable to successfully time the market. And, many find that their stock picks, bond purchases, and real estate investments are not beating the return on an index fund that tracks the S&P 500. Thus, many have moved to passive investing.

If you want to be an active investor and believe that your investment choices will outperform a set of passive investments, you need to spend the time necessary to track your investments and do research for picking new ones. If you simply do not have the time to do this, consider the simple steps to successful investing that we suggest. These steps are also useful if you are interested in ESG investing.

Simple Steps to Successful Investing PPT

Many would say that BP plc (BP)’s continued decline in the weeks and months after the oil spill was predictable, but then again, many were wrong with their immediate and “confident” doomsday predictions, so far, as they predicted the stock would continue sliding into single digits…totally missing the near 40% bounce off the lows in recent days.

The same kind of “confident” predictions were made about Greece and the euro sliding into oblivion and yet both have bounce substantially as it looks like the doomsday predictors were wrong…so far.

We don’t even need to go into these panic/disaster situations, a perfect example of how difficult predictability is Intel Corporation (INTC)’s blow out earnings the other night and how the stock was up big-time afterhours which led overnight futures to surge with many pundits calling for a major technology, not to mention overall stock market, rally to take place…no dice…never happened….INTC opened up huge then gradually down trended all day, their superior earnings seemingly already priced in.

Long story short: “confident” financial market prediction is for suckers.

There are far too many variables floating around for the news, let alone investors and traders, to ever be able to grasp and analyze everything well enough to make any kind of supremely confident predictions.

But that’s exactly why penny stocks should be considered as a predictable market. Let me explain…

This overly simplistic, hugely manipulated, much despised market niche is everything the rest of the financial markets are not: easily predictable.

Unlike forex, ETFs, futures, there are no hugely intelligent people working around the clock, considering every single potential profit angle and using complex algorithms to test out the reliability of various data sets and chart patterns.

Penny Stocks are only traded , promoted, manipulated and invested in by the dumbest, most greedy people in the world.

Sometimes Penny stock companies are either fraudulent or incompetent or both with short and longterm statistics proving that more than 99% of them utterly fail in every conceivable way.

In short, the players and the companies are predictable which is why I specialize in this underappreciated (thankfully) niche and why it’s not just possible/probable for me to earn index-and-everyone-else crushing returns, it’s possible/probable for me to be able to teach you too….this ain’t rocket science folks.

Please do learn from this short video lesson series I’ve put together:
Free Penny Stocks Video

Courtesy of Tim Sykes
www.timothysykes.com

More Resources

• Options Brief: BP plc (BP)
• Stock Market News Briefs: Allergan, BP P.l.c., ChevronTexaco, CSX, GlaxoSmithKline PLC, Goldman Sachs Group, Playboy Enterprises, Wal-Mart Stores, Apple, Infosys Technologies Limited | Daily Markets
• Predictbaility in the Financial Markets | Financal Advisor
• The Offside9 algorithm – a success, maybe… | Offside9
• Watch Serbia vs Ghana Live Stream, World Cup tv, Online Broadcast coverage, June 13,2010 | 2012 Doomsday Predictions
• Tracking down the uncertainties in weather and climate prediction | Serendipity
• IRS Patrol: Tax Assistance in Disaster Situations: July 17 is Gulf Oil Assistance Day « Stacie's More Tax Tips
• 2012 Hand Cramps! | 2012 Doomsday Predictions
• 2012 predictions of doomsday
• 2012 End Of The World | 2012 Predictions | Doomsday | Mayan 2012 Calendar | Astrology | Imagine18 | In A New World Through |