Review of stock online trading::What Does Bid and Ask Mean in Trading Stocks?
Investing in the stock market is worth the risk in my opinion, although some say it's a fool's game.
I started investing in the stock market when I was making less than $30,000 a year more than a decade ago.
Since I was not a high earner, I needed the stock market to do much of my work for me. Most people earning so little have more confidence in the lottery.
In fact, almost half of people making less than $30,000 a year feel that winning the lottery is their only chance of becoming a millionaire, according to a Consumer Federation/Primerica study. Spooked by the ups and downs of the stock market, some people rather save cash.
I know one person who is saving cash in a safety deposit box at a bank.
Meanwhile, my investments have steadily grown to more than $100,000 before age 40. Here are some of the ways I keep myself from being spooked by the stock market so I can become a millionaire by retirement: Know history repeats itself The stock market, like most things, has a predictable cycle.
Even the unpredictability is predictable if you look at the bigger picture.
Just as investing in the stock market was the "1999 way of getting rich," it will be the way to get rich in the future.
The S & P 500 returned about 28 percent return a year for the five years ending in 1999 because it was a bull market.
People who invest during the bear markets are buying stocks at a discounted price. Diversify and then let it fly Prudent investors do not purchase only individual stocks.
Diversification is common sense.
I buy a combination of individual stocks, different kinds of mutual funds or exchange traded funds (ETFS) and bonds.
I also like to make before tax contributions into a 401K and after tax contributions into a Roth IRA.
After making sure my portfolio contains a mix, I let it fly (or hold) to harness the power of time. Stay attentive but detached Just as you can be empathetic when your friends have money problems, but not get involved by loaning them money, you can pay attention to your investments and remain detached.
I don't get emotional about investments.
I check to see if I need to make any adjustments or tweaks and then step back and let my investments get back to working for me. View financial news as entertainment Financial news is about as reliable as the weatherman's report.
I know a woman who sold everything in her 401K when it was at rock bottom a few years ago because she was spooked by media reports of the "stock market crash." I knew she was making a major mistake.
It's entertaining to follow financial news, but I never let it spook me into making rash decisions to buy or sell stocks. I'm in the driver's seat I think I would be nervous about stock investments if they were being managed by someone else.
I always liked the idea of the "individual investor revolution," that refers to people who use discount brokerage accounts (or online trading websites) to invest on their own.
I can access my stocks immediately and pull the buy or sell trigger if I think it's prudent to do so. Some people think investing in the stock market is only for the Warren Buffets of the world.
But that's just not true.
If you don't earn as much, you don't need as much to retire.
I invest at least 10 to 30 percent of my income in stocks and bonds.
You don't need to be a financial genius.
I barely passed Algebra in high school, and I never took a finance class in college.
Yet, for as long as I've "played" the stock market, it's never played me. More from this contributor: How To Pay Off Your Mortgage Fast Keeping financial peace in my marriage The spending domino effect of buying a house
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