Investing for 2007. David Hall Blog

I am starting this Blog site to help the average person invest their hard earned money. The goal of these Blogs will be to help you understand the stock market and how to invest money in the stock markets. Please note that this Blog site will write in easy to understand terms to the average investor can get clear and easy to understand useful information. THIS IS MY PERSONAL ADVICE AND IS NOT TO BE USED AS SOLE INVESTMENT STRATEGY. Email me if you have questions. davidhallii@gmail.com .

I have been an investor for many years and have learned a lot of hard lessons. I am self taught in investing and have done well over the last 10 years. Prior to my self education I used so called "experts" for investing advice. These "experts" helped me lose a large sum of money. I fired the "experts" and took control of my investments. Since I have taken over my own investments I have made on average 17.56% each year in the stock market. Ask your financial provider if they can do that for you and your hard earned money!

Following my strategy you will learn how to invest in the best index funds, mutual funds and individual stocks and safe thousands of dollars on investment fees and financial planner fees. An best yet you will doing this yourself. It's your money and you have to be responsible for those hard earned dollars!

Let's begin. Your first lesson in how to invest in the stock market for 2007 is to:

1. Do your homework. You might be asking how do I do homework on the stock market. The fastest and most simplistic way is to use the Internet to do your studies. I recommend sites like:
www.cbsmarketwatch.com and www.yahoo.finance.com. These are great sites for you to use in your stock market studies. Start with the personal finance section and read away.

Your next lesson before you invest in the stock market is:

2. Understand that you will make money over time and you will lose money all the time if you are not in the market for the long haul. Investing short term is for "traders". Investing for long term is for "normal people". What is long term? At a minimum to make money in the crazy stock market is 5 - 7 years. This is the minimum time needed to make your money work for you.

Your next lesson is to:

3. Realize that you can manage your own investments all the time and every time! Brokers are in the business to make money off of your hard earned money with investment advice. Did you know the the average stock broker and investment professional loses money year after year? Did you know that just investing in stock market indexes will always beat the average investment professional and mutual fund manager? Imagine doing your own investments and beating the pro's year after year. I do it and you will too.

4. Before you invest one red penny in the stock market you MUST have at least 3 months of living expense money saved and available in a simple money market account or savings account. There is no way at all that you can invest in the stock market unless you have your living expenses covered in case of an emergency. Remember you are investing in the market for the long haul. I keep my living expense money in Vanguard's Prime Money Market account.www.Vanguad.com

5. Before you invest in any 401k plan or personal investment plan, pay off your high interest debt. It does not make sense for you to have credit card or any other type of debt while investing in the stock market. Investing your money is an honor to your hard work. Having debt and investing in the stock market is like striking a match near gasoline fumes. Eventually the match will ignite the fumes and BOOM goes your net worth and hard earned dollars down the drain. Investing while you have debt is one of the stupidest moves you can do.When is OK to invest when you have debt you ask? I tell everyone that the only time you can invest with confidence is when you have only a home mortgage as your debt. Nothing else. No car loans, student loans, etc... Your path to financial freedom is when you have assets and no debt. Did you know that we are the only developed country in the free world that does not save money and we spend more then we make? How crazy is this? Want proof? www.bea.gov/breifrm/savings.htm.

Now that we have the very basics down it is time to start investing. So where do you start? Well let's look at a few things before you begin to invest.

First, how old are you and when do you plan to retire? This is extremely important! If your young, say in your 20's, 30's and early 40's then you want to take more risk in the market. If you are older and wiser say in late 40's, 50's and early 60's you want to look at a more "fixed" income option for your investments. For now we will concentrate on the younger group.

To start let's look at some investment options. First do you have a 401k plan? If you do then make sure you contribute the maximum to this plan! Why? If you are young count on this to be your money to retire with. There will be no Social Security for you. There will be no pension plan for you. Our U.S. economy is on the path of destruction and there will be nobody to take care of you except you. Invest now. Make sacrifices now while you can. Don't be a "sheep" and do what every one else is doing. Invest, invest and invest! Having a 401k now is a gift that will give back to you many times over when you are old and retired. Want motivation? Go visit an average elderly home. I will guarantee that you will save like crazy when you see what is in store for you if you do not save now.

Your 401k will have options to invest in. Most plans today only offer mutual funds and some may offer index funds and some even ETF's. If you have a plan that offers only mutual funds and index funds ALWAYS go with the index funds. Your best bet will be to go with the Total Stock Market Index Fund or Total International Stock Market Index Fund. I suggest that you invest in International Index Funds. These funds continue to beat U.S. index funds. Why? We are over developed in the U.S. equity markets. Why invest in the U.S.A. and get a 9% return on your money when you can invest in international markets and double your returns. My favorite international funds today are with Vanguard, www.vanguard.com or Fidelity, www.fidelity.com.

I will be back with more this week!