The process of buying and selling stocks may seem easy but if you want to be successful in investing and gain profit, there are a lot of things you need to know about the stock market.
Are you familiar with these words?
Technical analysis, volatility, bull run, correction, crash, oversold, overbought, passive, tactical, buy and hold, etc.???
These are just some of the terms that you need to learn to be successful in the stock market. For most people however, they worked at a company for 30-40 years, saved up money in their 401ks, 403bs, and IRAs and move into retirement never knowing these things. Why?
Because it was never ever taught to us in school. Finally, in the state of Florida incoming high school freshman have to begin taking a mandatory money management class where they will probably learn these things. But us old folk never learned these things unless you went to college to learn these things like I did.
After being a financial advisor for 22+ years now, I’ve learned a number of things that can be the difference makers between a comfortable financial life and one that is filled with worry. You definitely don’t want to enter retirement feeling like you always have to look over your shoulder.
So here are 3 things you need to know about stock market.
1. A Market Correction Isn’t a Crash. Don’t Panic
A stock market correction happens when an index like the S&P 500 falls 10% or more from its high. Though stressful, corrections are an inevitable, natural part of the market cycle and they happen around 1 time a year!
2. Corrections Aren’t Always Bad for Markets.
Corrections can cool off overheated markets before they head into “bubble” territory. They can also help savvy investors pick up solid investments at bargain prices.
3. A $100 Stock Isn’t Expensive And A $5 Stock Isn’t Cheap
The price of a stock does not determine whether it is a good buy or not. There are a lot of factors to consider in buying a stock, and the key here is to do enough research. You should also establish your goal in buying a certain stock to avoid emotional buying that might cause losses
Among individuals who began investing last year, 86% plan to increase their stock holdings in 2022, according to a recent survey from Investing.com.
But here’s the big question, where does the stock market fit into your overall financial goals? How much of the “Stock Market” do you need to keep you On-Track Financially?
How much risk do you want to have when the market hits one of those corrections or crashes?
If you do a Stress Test on your money and found out that if the market drops -45% that you too would lose -45%, would you be ok with that?
Retirement is like a jigsaw puzzle with 1,000 pieces and you need to know how and how much the stock market plays into that puzzle.
Unfortunately, the financial world has taught is incorrectly that retirement is just a jigsaw puzzle with just one piece, the stock market, and that couldn’t be further from the truth.
So start with this, what do want to get out of your life financially in retirement? What’s happening to your money now? Is it fully optimized or is there unnecessary risks being taken that you don’t know about?
A Stress Test could answer all of this for you, and we can help you figure out if that Stress Test is even necessary in just a quick 15-minute call.
This is something we are doing numerous times each day to help people find out if they are On-Track or not.
Just CLICK HERE and you can set that quick 15-minute strategy call with us right now.
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