Stock and Securities Investing

Investing money in stocks and securities, as far as I’m concerned, is the fun part of becoming financially independent. Making informed decisions as to where and how to invest, utilizing risk management strategies, and creating customized investment plans for your most important money will set you apart from other investors. Over my career, I’ve taught thousands these same strategies, and I can teach you too.

Risk Tolerance for Investing

Before creating your investment plans, determine how comfortable you are with risk regarding investing. Maybe you’ve already taken one of those ubiquitous risk management quizzes you see on the internet. Although there are a few good ones, I find many of them unhelpful and even silly.

I favor you assessing your own risk tolerance for investing. It’s important you get it right; Otherwise, you’re less likely to stick with your investment plan when the going gets tough.

Risky to Not So Risky Ratio

What’s the first step in creating your investment plans after determining your risk tolerance? Determining your risky to not-so-risky ratio for next year. This alliterative ratio should consider both risk tolerance and time horizon in the first year and all subsequent ones.

Dynamic Diversification

Next, make sure you add plenty of dynamic diversification to both the risky and the not-so-risky sides of your ratio. This ensures a smooth landing and increases the chances of you achieving your goal despite possible negative market conditions.

Rebalance and Reassess

After initial setup, only occasional tinkering with your plans is necessary, freeing up your time for other less boring activities. At least once a year, however, you absolutely must rebalance and reassess your investment plan. If you don’t, you could violate tenet number 2 on my list of 5 Tenets of Successful Stock Investing, which you never ever want to do.

Getting More Involved

My One-Stop Shop Investment Plan is among the simplest of investment plans yet yields great results with minimum effort. Getting More Involved with your investment plan might mean tinkering with it a little or a lot: It’s up to you to choose your level of involvement. Just be sure you have the extra time to commit to performing the extra management duties.

The strategies presented here are the same ones I use. They’re also utilized by many successful professional traders and are based in part on Modern Portfolio Theory and the science behind it. Use your favorite search engine: There are lots of online resources to help you understand it better. Or click on the external link above.

Becoming Financially Independent

These strategies are not the next new get-rich-quick scheme, app, or gimmick. They will, however, build your wealth faster regardless of your accepted amount of risk, be that super-aggressive, super-conservative, or somewhere in between. And they’re designed to maximize your returns no matter what your stage in life: Just getting started, mid-career, approaching retirement, or already retired.

DIY Stock and Securities Investing is book 3 in my 3-book series Becoming Financially Independent. Purchase an e-book or paperback.