3 Investing tips you're probably not thinking about
The stock market was up 28% in 2021 and 260% in the last decade.
Here are 3 tips to get started investing safely.
1. Don’t look for the perfect stock!
Tesla may be up 46% over the past year, Apple up 30%, but don’t be distracted by the runaways.
Instead, look for stability with a broad index of the stock market, whether an index of the Tel Aviv 35 ( TA-35), the technology sector index, Nasdaq (stock symbol: QQQ) or the 500 largest companies in America index, the S&P 500 (stock symbol: SPY) all of which can be bought from Israel.
​
​
Owning a broad index of the market, has historically returned 10% on average per year over the last 95 years, is one of the key wealth building strategies and often outperforms individual stocks.
​
70% of professional investors, whose job it is to find great stocks, don't beat the market index returns.
2. Do NOT invest a lot of money at the same time, instead do this....
​
​
​
​
​
​
​
​
​
​
Invest slowly at first using dollar cost averaging (DCA). This is a strategy whereby instead of investing all of your money at once, you invest smaller amounts, at regular intervals, consistently, regardless of the underlying price.
This is how money you contribute to your pension is invested, as a fixed amount, put in monthly from your paycheck.
Example: If you have 1.2K nis to invest, rather than investing it all together (which is called lump sum investing), you would invest 100 nis, each month, for the next 12 months.
In the case of a stock market crashes it is one of the most effective investing strategies.
3. Protect your money, with the right time horizon, here's how...
In the last 90 years the stock market goes up over 70% of the time, its a FACT. But crashes occur, on average once every 6 years. Crashes are relatively rare, and every crash in history has recovered but you can't predict them.
If you are in a rush and need your investments to grow in the next few weeks, to buy a new car, or cover a big expense you will face a main investing risk, a short term horizon.
Protecting your money is priority #1
So how much time do you need to avoid time horizon risk? Ideally invest money that you don't need in the next 1 to 2 years as that will give it time to grow and if there is a pullback there is more time to recover, stress free.
​
Top 5 investing strategies for all investors
​
Learn about
-
Stock Market Returns
-
How PROs create their portfolios
-
Passive income investments
Watch my video on
About Malcolm
Malcolm Berman holds an MBA from Georgetown University, has been an active investor for 10+ years, & teaches classes on investing in the stock market.
He has worked in investment banking in London, Sony PlayStation and most recently Director at Vayyar in Israel.
​
Malcolm & his family made aliyah from San Francisco in 2014 & live in Ra'anana.
