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Gunnarsdaddy (43.35)

Why investors like me take a drubbing in the market.

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October 31, 2013 – Comments (1)

What an interesting set of stories today.  I just saw this:

http://www.fool.com/investing/general/2013/10/31/is-this-bakery-a-buy-after-its-recent-pullback.aspx

I read it about 2-3 hours after reading this:

http://www.fool.com/investing/general/2013/10/31/panera-darden-and-ruby-3-stocks-to-stay-away-from.aspx

So, which is it?  I don't know enough to say if I'm an 'average' investor, but I do think there are a lot of others like me.  We understand basic math, economy, we know that debt is bad, liquidity is good, we've likely eliminated our debt, and made at least a mental plan for our investments.  But when I read conflicting reports on the same website, two things happen to me.  First, I get the deer in the headlights look and think 'Whut?' and then another thought hits me - the analysts aren't any different than us, and are quite often wrong.

Since I've started here on The Motley Fool, I've done a lot of reading of all sorts of information.  I'm not going to say that either of the authors of these reports have specific agendas.  In fact, both reports make valid points.  My takeaway from all this?  Do your due diligence before investing! 

The keystone to my investment plan, right now, is build.  I've purchased some stocks, some ETFs, and set all of the dividends to re-invest.  I don't have any alerts for anything hitting a specific price so I can sell for a gain (though I do have alerts for large downturns).  For me, the essentials right now are: solid company, good returns and consistency.  My research to this point has focused on low debt, low volatility, and above average returns.  Most of the company names that show up in screeners have been companies that I already know something about.  

If you're new to investing, like me, and you haven't memorized how to calculate P/E ratios, EPS or other details, you can still feel good about your investments if you take all of the emotion out of your choices (I like blueberry muffins, but I wouldn't buy Panera based on that alone).  Focus on your plan, whatever it is, and STICK with it.  Just because someone says "This stock is going to pop!" doesn't make it so.  Take the time to really look into a company, or fund, before you dive in, check several different locations, and don't rely on headlines!

1 Comments – Post Your Own

#1) On November 01, 2013 at 3:10 PM, Valyooo (99.37) wrote:

On average the average investor is average (duh). If everybody had the same view on a stock then the stock price wouldn't fluctuate. That's why you and only you can make the decision. Use analysts for facts but not opinions. And if you don't have the time or enthusiasm to delve deep, then stick to index fund ETFS, and there's no shame in that

 

i personally don't like the idea of automatically reinvesting dividends....you want to buy low, not make a predetermined quarterly purchase  

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