If you want to get rich very fast, stay away from stocks and the stock market. Buying stocks is investing for the future. But which stocks do you have to buy?
You have to start investing with money you do not need. If there is a possibility that you need that money in a couple of years, stay away from stocks. Investing in stocks is for the long run. Of course if you happen to have sure information about a stock of which the price is going to rise buy it.
Most of the biggest investors buy their stocks and hold them for many years. Look at Warren Buffett and his stake in Coca Cola (KO) for instance. Those investors will not be upset if the stock market declines. And then rise again.
They do not waste time by trying to exactly timing the market when they want to buy a stock. It is almost impossible (understatement 😉 ) to exactly time the market to always buy at the bottom and sell at the top. Even for professional investors. So why put all effort in as a normal investor!
This is one of the lessons I already knew, but learned again in 2014. In September of 2014 I did my research of Chevron (CVX). I calculated that the good price to buy CVX was approx.$ 99. In October/November oil prices went down very quickly. And yes I was getting excited! The price for CVX went down to around $ 100. At that time I was shifting some of my capital to my broker account. Yes I wanted to buy CVX. This would be a great addition to my Vrijheid Fonds. I was ready for it!
I waited and waited hoping that the price was declining even more. And I was convinced (after reading a lot of news articles) that the bottom was not yet reached. But too bad, the price went up again. I missed out on a great possibility! Grrr 8&^%!
So I missed out to buy 21 stocks of CVX, just because I wanted to pay a slightly lower price. For a lousy $21 dollars, I waited. As you readers know the stock prices went up in December and gone was my opportunity. Because of $21 I did not buy at that time. This is also the amount of dividend in one quarter that CVX is paying. This to put it in perspective.
The lesson from all of this for me is, that if I think a stock is great addition to my portfolio, make a decision and buy it for a reasonable price. And this is not always the best price I have calculated. Because I’m in it for the long run, the actual stock price for dividend stocks is not that important!
P.s. In January 2015 I bought CVX for approx. $109