UGLY

Could someone please help me with what investment strategy is good. I got into an argument with my brother in-law and I said I would invest in a solid company with regular steady growth and minimul loss but also with low return on investment. He said I was dumb and shouldnt invest in stock that only tend to grow but ones that rise and fall as to buy low when the price falls. I am not looking for financial advice just an exlanation of wha is good or not.

FloggingSully

it depends...

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M Richardson

I think your strategy needs to change as your situation changes. When I was younger, I was willing to take greater risks with my money. I was willing expose myself to loss in order to gain greater return. (Remember, ALL investing is gambling.) Now, as I approach retirement, my investments are much, much more conservative. I like nice, steady growth that outstrips inflation, with as little risk as I can obtain. No big numbers anymore, no bragging to my buddies about making a killing (or moaning about taking a bath). But I know the money will be there in a few more years when I need it.

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Flop The Nuts

He said I was dumb and shouldnt invest in stock that only tend to grow but ones that rise and fall as to buy low when the price falls.

Every stock, non matter whether a value stock or a growth stock, rises and falls. Apple, Google, and Netflix are all considered growth stocks, and all have fallen over the last few months. They've all begun to recover, but if you wanted to buy into those stocks on a dip, you had your chance recently.

RYou

but ones that rise and fall as to buy low when the price falls.

Uncle Sam loves that kind of buyer. Whatever profit you make you share with him big time at the ordinary tax rate and your broker takes a good chunk also. If mistime the buy, you're exposed on the short side.

It's very easy to say buy low sell high, any number of factors can throw a wrench in that plan and leave you with a significant unexpected loss. Heck I've been in some steady growth stocks that garnered 15% a year and lost it all overnight because corporate gook bungled the business.

For short term gains and longterm potential, I like IPOs but you need to look at their fundamentals. Two I'm sitting on right now are Visa and Intrepid Potash. Both went to market in the past 2 weeks and have done great so far. I'll rethink the buy after about 28 days when the issuer is no longer going continue "making the market". Visa maybe th Googlish. IPI may just be market flash since there was a huge issue voluma and it's not well positioned in the industry. Plus side, potash prices, like oil have been zooming through the roof. The pricew will be link to the price of oil since potash is the fertilizer for corn to processed into fuel. They also have a mine in New Mexico that they are thinking about opening up and that would hurt the price since it would introduce more supply and knockdown the price of potash.

matclone

An important principle in investing is to not put all your eggs in one basket.

But if you are just starting, and have to start somewhere, there's nothing at all wrong with investing in something with steady growth. Those used to be (and maybe still are) called blue chips. I believe Warren Buffett has made a fortune with a point of view not too far removed from that.

As M Richardson pointed out, your strategy may vary with your age. As a young person, you may want to invest in riskier instruments, but if it's stocks your talking about, that idea is premised on you holding them for a longer period. To me, jumping in and out of stocks at any age is more akin to speculation than investing and not a good choice unless you have the inclination (i.e., know what you're doing) and stomach for it, and most of us don't.

I see nothing wrong with the strategy you've outlined.

contini

buy low, sell high

M Richardson

RU - you play the commodities markets? You are a much braver man than I.

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jpv

BINGO!

ccbig

The best strategy is to be a investment broker.

That way you make money on other people buying and selling stocks (A percentage of the stock price or by a flat rate). The broker makes money whether the stocks rise or fall.

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