Category Archives: Stocks

Penny Stocks Could Cost You a Pretty Penny

Okay so the title is designed to catch your eye. But if you are thinking about investing in penny stocks it is worth realizing you could lose a lot of money in doing so.

This is not meant as a scare story, merely as a way of reminding you that investing in penny shares doesn’t make them any less volatile or safe than regular shares. Indeed, they are generally even more volatile, which is the reason why they are available so cheaply anyway.

Think about the value of a company before you invest

Let’s say Company A has shares valued at one cent each. Company B has shares valued at $6.78 each. Clearly there is a lot more value in the shares of Company B than those of Company A. This is because penny shares are made available by those companies who show promise for the future. They are created largely to generate funds to put back into the company so it can expand and develop.

Of course we all know lots of companies and businesses fail in their early days. So your task is to invest in penny shares released by companies that have the biggest potential for a great future. Lots of people wish they’d invested in IBM or Microsoft when their shares first came out. They’d be worth a lot of money by now. And when you think about the idea behind penny shares it is easy to see how such an investment can seem extremely tempting.

The reality behind penny stocks and shares

Let’s take a look at the reality of the situation now. The truth is penny shares are affordable for many people looking at getting into the stock market. But they are the riskiest shares of all. You may be able to afford more shares from Company A than you ever could from Company B, but that doesn’t mean it is a wise investment.

The bottom line here is to consider how much you can afford to invest – and also to lose. There is a bigger chance of penny shares nosediving in value and becoming worthless than there is of shares in any other company doing the same thing. There are exceptions of course, which is why you should never invest in any types of stocks or shares unless you know what you are doing and what to expect.

Many people say you should only invest money you wouldn’t miss when it comes to penny shares. There is a lot of truth in this. You should never really invest in it to gain a particular amount of money in return. It is far more speculative than other shares, which is why they are not for everybody.

This doesn’t mean you should avoid them at all costs of course. It just means you should be aware of the pros and cons and of what you are investing in. The more you understand about penny shares, the better your chances are of getting it right.

How to Use the ADX Stock Indicator

The ADX indicator can be a useful tool when it comes to gauging whether a particular trend is worth following in terms of investments. The indicator was created back in 1978, and the letters stand for the Average Directional Movement Index.

Most people are familiar with trends and how they can influence our need to buy something. If a particular fashion look is trendy, more people are liable to buy it. But every trend is only likely to last for a particular time. This means those fashionable slacks you have may not be so trendy next year, so you’d likely ditch them before then.

Spotting trends

The same thing applies in terms of the ADX stock indicator. It allows you to see whether a trend is weak or strong, and you can thus gauge whether to buy or sell your investments – in the forex market for example – as a result.

Generally speaking if you see an ADX value that drops below about 20, you can consider that to be a weak trend. The lower it goes the weaker it will be. Conversely if it should go above 40 it will be an indicator of a strong trend.

Which indicator is the most important one to be aware of?

In truth, both ends of the scale are worth looking at. You don’t want to invest in things that have weak trends because they aren’t likely to go anywhere or get you any particularly good results. Of course you can keep an eye on them in case things change, but generally speaking you should ignore them for now.

The interesting ADX indicators are those that start climbing. Some say anything above 25 is worth looking at, so you can see that an indicator measuring 40 is well worth a closer look.

Should you abandon all other methods of choosing stocks?

No – using the ADX stock indicator should form just one part of your overall strategy to find stocks that are worth investing in. If you use the ADX indicator for just one thing, it should be to find the magic number 25 and to see whether the trend is going up or down from there.

This will help you spot the strong trends and avoid the weak ones. A value of 25 that starts going up will be well worth taking a closer look at, for example. If you use this indicator along with a number of other tools, you can narrow down your investment options. Hopefully you will arrive at a far better result than you would have had before.

The ADX stock indicator takes a little getting used to if you have never used it before. As with any other stock picking method, it makes sense to have a few dry runs and to ‘invest’ in chosen stocks in a virtual sense first to gauge your success rate. You can then work out whether you want to go ahead and use it more often.

Using Foreign Stock Brokers

If you want to start investing in the stock market, you have two options open to you. You’ve either got to go it alone and make your own investments, or find a broker to do it for you.

This sounds easy on the surface, but if you want to invest in foreign stocks you may want to think about using foreign stock brokers instead of those in your own country. Of course some stock brokers do deal in stocks outside their own country – a lot will depend on the size of the company the broker works for and whether they deal in such markets. So this is worth a look before you do anything else if you are already using a broker.

But if you’re starting from scratch, here are some tips for using stock brokers based abroad that are well worth bearing in mind.

Look around and do your research first

It’s wise to suggest you don’t just jump in and select the first stock broker you come across. There are plenty of them out there, and if you’re selecting one in a foreign country it can be even more difficult to know whether you’re picking the right one or not.

Fortunately the internet has made the world even smaller than it was when we first started using commercial airplanes. Use it to your advantage and research each potential broker you are considering using. Use more than one source to find out about each too.

How easy is it to contact them?

If you chose a broker in the US you’d be able to pick up the phone and call them without worrying about hefty phone charges. This doesn’t apply for foreign based brokers.

In addition, you need to consider whether there might be a language barrier. This won’t apply in all countries, but if you’re in the US and you’re thinking of using a stock broker based in China you might have a problem.

Consider the conversion rates for charges

Remember too that conversion rates will apply if you’re converting your US dollars into a foreign currency. Make sure you work out some sums and find out what charges will be levied if you opt to go with a particular broker. This alone can make a big difference to what you make on a successful deal.

As you can see there are several points worth thinking about before you dive in and find a foreign stock broker. Alongside all the regular points to consider, there are several more that become more important when you want to hire a stock broker in another country. If you think about the above points and make sure you know the process to expect before doing anything, you’ll stand a much better chance of making this task easier and more successful.

There is a lot that could go wrong when you go down this route – but equally there is a lot that could go right as well. Make sure you pick the best outcome by doing your homework first.

Why Do Stock Share Prices Change?

Even if you don’t yet know too much about the stock market, you’ll probably be aware that prices change on a regular basis. But why is this? Why can the price of one share be at one level on one day, and an entirely different level the next? Let’s find out more, so you know what to expect if and when you start buying or selling shares.

Supply and demand

This natural law means the price of something – anything, not just shares – is likely to go up the fewer items are available (supply). However it also relies on how many people want that item (demand).

Let’s say there are 100 shares at $10 each. If less than 100 people want them, the price might drop or stay the same. If more than 100 people want them, the price will rise. If there are 1000 shares at $50 each and less than 1000 people want them, the price would stay static or drop. More than 1000 buyers would lead to a price rise. So you see the amount of shares available and their initial price do not matter. It is the law of supply and demand that matters.

Profit warnings

Sometimes businesses will issue profit warnings if they are having a tough period of trading. These will usually lead to a drop in the share price, as the business could be in trouble. The shares will not therefore be as valuable as they would be if a business issues a good report on its earnings, pointing towards a better and more profitable future in turn.

The influence of outer forces

This might sound like something in a sci-fi drama, but in reality it’s nothing of the sort. Every business is affected by all manner of external forces. This could be anything from a rise in interest rates to a recession. If a business starts experiencing problems owing to an external force such as this, you can be sure the share prices will be affected accordingly.

Of course if a business bucks the trend and still brings in good profits despite such issues from outside, its share prices will typically rise and improve. This will be in contrast to other businesses that may be struggling.

The actions of a large shareholder

While some shareholders have relatively small amounts of shares, others have lots. These are the big shareholders that represent companies of various kinds, such as insurance brokers. If one of these shareholders should sell their shares – for whatever reason – it can spark panic among the rest. Why are they selling such a large amount of shares? Even if the company isn’t in trouble, this type of action can send the prices into freefall.

So you can see there are lots of reasons why the prices can change. The more you understand this before buying or selling shares, the easier it will be to understand the movements of the stock market. It also adds to your knowledge, and that can only be a good thing.

How to Buy Private Stock

Most people are aware that it’s possible to buy stock in various companies with the hope of it going up in value. However it’s not correct to say that all stock is the same. There are two types of stocks – public and private stocks. Public stocks are the ones most people are familiar with. They can easily be bought and sold so you have complete freedom in deciding which ones to get and which ones to avoid.

However this doesn’t apply to private stocks. So let’s find out a bit more about them and discover whether you can actually buy them.

How to find private stocks

This can be easier said than done. The fact they are private means they are much more difficult to find than public stocks. Private companies are not required to release financial information and thus you may not have any information at all to go on. In the past the easiest way to have a shot at buying these types of shares was to work for the company and hope you were issued some at some point.

Furthermore since the shares are not made public for anyone to buy, you may not have any opportunities to buy them. It’s very much a case of knowing someone who has these shares so you can ask if you are able to buy some. There is a relatively new way of doing this that makes good use of the internet. A new website called Sharespost has been launched recently ( that aims to make it easier for people who want to buy private stock to get in touch with people who have private stock to sell. The major downside is the $2,500 fee required to buy or sell stock on this website. Thus the site is not for beginners.

An alternative is to consider Second Market ( which also has a section that can bring together private stock buyers and sellers.

A notable caveat

As with any shares, it is wise to find out as much as you can before buying any of them. The very nature of private stock is that it is difficult to glean much information about in advance of purchase. This is why you are better off avoiding private shares altogether until you have some experience buying other shares. The more you get to know about the market, the easier it will be to stand a chance of putting yourself in a position to buy private shares.

It can be a good idea to ask people you know who work for these companies to see if this will create any opportunities for you. You never know, simply having a conversation with someone you know and trust could result in an opportunity to buy. However always do your homework and don’t buy simply because you know the person selling to you. Ask yourself why they want to sell and what this may mean for you. As always caution is advised.

How Are Stocks Classified?

If you’re just starting to explore the world of stocks and shares, you’re probably wondering how to figure out which stocks to buy and which ones to steer clear of. It’s best to start by looking at the different types of stock classifications that exist, because this helps to divide the stocks into specific categories.

To this end, we’ve listed some of the most popular classifications here. You’ll find you start coming across these terms as you start considering which stocks to invest in.

Small, mid and large cap

‘Cap’ stands for capitalization. To work out the capitalization of a particular stock, you take the volume of outstanding shares and multiply that figure by their actual price. Small cap usually means the capitalization is under a billion dollars; mid means one to five billion dollars and large is anything over that.

Blue chip stocks

This is one phrase most people will be aware of, regardless of whether they have been involved in buying stocks or not. A blue chip stock is one released by a blue chip company, i.e. a company that has been around for a long time and which consistently delivers good results. They may not deliver huge profits but they are seen as reliable and they have far less chance of delivering a loss.

Cyclical stocks

As the name would suggest, these stocks perform well at some times and not so well at others. Take energy stocks for instance. There will be times when there are big leaps forward in this industry, particularly with regard to green energy. At these times you can expect stocks to improve in value. However there will also be times when there is less demand for energy or poor news relating to the sector, and thus the value of stocks will go down.

Defensive stocks

Just as cyclical stocks focus on business sectors that can go up and down, defensive stocks focus on those that are more reliable. Any company that provides a staple item – such as food for example – will typically fall into the defensive stock category.

How can you get the right mix of stocks in your portfolio?

Defensive stocks will be more consistent in their returns than cyclical ones. They are reliable but having said that they won’t produce impressive returns. Cyclical stocks may produce better returns but only at certain times of the year.

Clearly a balanced portfolio is in order if you want to make the most of your returns. It will take time and effort to learn more about the different types of stocks you could invest your money in. However this time is worth spending because you stand a much better chance of receiving a good return.

It is also worth remembering there are many other different types of stocks – hundreds of different classifications – you could delve into. The ones listed here are some of the main ones, providing a good starting point to work from when you are just getting involved in the stock market.

A Brief History of Stock Exchanges

Stock exchanges have been around for hundreds of years. In fact, historians have traced the origin of the first stock exchange to France somewhere around the 12th century. Brokers traded stocks along the London Exchange, hence the term “stock exchange.”

The very earliest traders recorded seem to have traded things like government securities and debt notes. Throughout the 1500s, loose, disconnected markets were formed, and unofficial trading became more and more commonplace. Brokers met in an informal manner, making trades in coffee houses and other social arenas. In fact, the first official stock exchange didn’t even come about until 1602, when the Amsterdam Stock Exchange originated. It began when traders bought and sold shares of the Dutch East India Company, which were the first company stock shares to ever be sold.

The Stock Market Matures

The stock exchanges began to get their sea legs, and then by the beginning of the 1700s, there were already official stock exchanges in full swing in both England and France. They were so official, in fact, that bigger companies began to rely on them to raise money for investments by furnishing investors the opportunity to get a cut of the company’s potential profits. Since there was no real regulation to speak of in those days, scandals and backroom deals abound. Almost everyone had a chance to participate during that time, so there was no screening process to be eligible to trade.

The Stock Market in the United States

In the US, by the end of the WWII era, the country had entered a new phase in the history of investing. People were excited to trade, and the economy was flourishing. Investors were highly optimistic, and that optimism translated to a marked increase in people investing in the stock market.

Then, the markets took a turn for the worse. At the start of the day on October 24, 1929, there was a sudden and dramatic drop in stock prices. People far and wide were selling off their shares as quickly as they could. In fact, the stock ticker was so clogged with dropping prices that it fell behind at one point. This was the event that single-handedly ushered in the great depression and caused regulation to be implemented, which resulted in the modern stock trading we engage in today.

Now more than ever, stock markets are regulated. They exist all around the world, and we are quickly becoming a global economy, so the stock exchange as we know it today may evolve exponentially in as little as ten years from now. If you want to purchase shares now, you must do so through a licensed stock broker. Although the criteria to be listed in a stock exchange varies depending on the exchange in question, it is nevertheless an extremely regulated process for a company to be listed. Stock exchanges were face-to-face trading events in decades past, but the system is now moving toward becoming fully electronic and automated.

Understanding the Different Stock Indexes

Stock indexes can be confusing at times. There are different types, but before we delve into that, it’s important to have a rudimentary understanding of what exactly stocks indexes are. Every day, millions of investors all over the world are buying and selling hundreds of thousands of stocks.

With so many stocks flying around, things get confusing mighty quickly. That’s why many different tracking companies – or “stock indexes” have popped up over the years. Their job is to track how certain segments of the stock market (or entire stock markets themselves) are doing in their day-to-day trading activities.

Different stock indexes keep tabs on different kinds of companies. Some stock indexes focus their tracking activities on solely large-cap companies, while others keep their sights on just the small-cap variety. Still others track the stock market as a whole. For instance, one very broad stock index in the United States is the Standard & Poor 500 (S&P 500). This index tracks the broadest range of businesses – in fact, it covers 500 of the largest companies in the US today.

Big Stock Indexes

Big stock indexes are the most common variety of stock trackers out there today. Arguably the most well-known of these types of stock indexes is the Dow Jones Industrial Average. This index tracks the ups and downs of thirty of the most highly influential businesses in the United States today. Some examples of these big players tracked by the Dow Jones include General Motors, General Electric, and Wal-Mart. The Dow Jones places precedence on the most expensive stocks out there, however, so a big stock index like this one is actually considered a “price-weighted index.”

This generally means that the index rises and falls depending on the fluctuations of these thirty companies as a whole. Some analysts think that this does not provide an accurate representation of the world’s economy; they don’t think that it paints a real picture of the rises and falls of every company out there.

Market Value-Weighted Stock Indexes

The previously-mentioned S&P 500 is different from a price-weighted index. It’s called a “market value-weighted index,” which means that the S&P 500 measures and tracks the combined value of stocks that all the companies in the index sell to investors. Basically, this means that stocks sold big the largest companies and with the largest market shares will have greater weight within the stock index.

It makes sense for larger companies to have more weight within a market-value weighted index, but this type of index does have its downfalls. For example, sometimes when a bubble develops that artificially inflates one segment of the economy, such as the bubble created by tech stocks in the 1990s, it can cause a ripple effect when it bursts that negatively impacts the rest of the stocks in the index and devalues the stock index as a whole.

5 Types of Common Stocks

If you’re even slightly new to investing, then it’s imperative to know the basics before you get too deep in the process. One of the most basic things you should learn about the stock market is the types of common stocks that exist. When people talk about stocks in general, they’re most likely referring to commons stocks.

The vast majority of stocks are issued in the form of common stocks. When you buy “common shares”, each share that you purchase represents your partial ownership, or stake, in a company. It’s essentially staking your claim for a portion of the dividends (read: profits) that the company generates. They may go up or down depending upon how the company performs.

In addition, when you buy common stocks, you become an investor in a company, meaning that you get a vote for each share you own. This vote can help elect board members depending upon the amount of stock you own. Let’s take a look at five of the types of common stocks that are out there.

1.       Penny Stocks

Don’t invest too heavily in penny stocks unless you’re feeling risky. They’re the most speculative form of stocks around. The rule of thumb for a stock to be considered a true “penny stock” is whether it’s priced at $5 or less per share. If it is, then you have yourself a penny stock. Companies that sell penny stocks are not quite established yet – and most are still deep in the development phase of their growth. A second kind of penny stock company is the kind that is offered by a company that is flailing financially. Penny stocks for either type are highly risky because there’s a huge chance that the companies you invest in may fail.

2.       Blue Chip Stocks

The biggest companies in the world – think Wal-Mart, Google, and the like, only offer blue chip stocks. These companies have higher-priced shares with little room for growth, but who cares? Adding a healthy mix of blue chip stocks to your portfolio will lend a great amount of stability to it because the likelihood of these companies failing is extremely low, and returns are as close to guaranteed as you’ll get in the stock market.

3.       Utility Stocks

Utility stocks are simply stocks issued by companies that offer public works services such as power and water. There’s limited competition since most of these companies almost have monopolies in the areas they service. That’s why utility stocks are low-risk, because their returns are almost guaranteed. However, the amount you’ll profit is marginal.

4.       Emerging Growth Stocks

Emerging growth stocks are offered by up-and-coming companies that are still in the growth stage and figuring out the best tactics for management and company structuring. Investing in these kinds of stocks may not yield anything at first. There is a chance for huge rewards down the road, but there’s also the chance that you’ll have a bankrupt company on your hands. Companies that offer emerging growth stocks tend to be volatile while in development, plain and simple.

5.       Established Growth Stocks

Companies that offer established growth stock have a proven track record, and they’re established enough not to be a high risk for bankruptcy. At the same time, the rewards are minimal compared to other types of stocks. There’s room for massive growth down the line, however.

What Are Some Company Names and Stock Symbols?

Company names and stock symbols are commonly confused. To make a long story short, a stock symbol (which can sometimes be called a “ticker symbol”) is simply a short abbreviation that investors use to uniquely identify all of the shares that are publically traded within a particular stock market. There are many different formats for stock symbols, and they may consist of numbers, letters, or even a combination.

The reason that stock symbols are occasionally known as “ticker symbols” is because the symbols were originally printed on the tape that ran from a ticker tape machine.

History of U.S. Stock Symbols

Standard & Poor (S&P) had the desire to add uniformity to the investment process, so the stock exchange implemented stock ticker symbols that were more modern and boasted only letters. Before that time, one company may have had dozens of different ticker symbols floating around depending on the stock exchange in question. Needless to say, that way of doing things became mighty inefficient in a hurry. The S&P changed all that, and then years down the line, the securities industry as a whole standardized the method to make it official – it had finally become the industry standard. However, to this day, for preferred stocks, stock symbols have yet to be standardized.

Examples of Stock Symbols in the United States

Let’s take a look at the standardized stock symbols for some of the biggest companies in the United States to get a better feel for the way companies are tagged in the marketplace. Some of the larger company stock symbols are as follows:

AAPL – Apple Inc.

BAC – Bank of America

C – Citigroup Inc.

GOOG – Google

HNZ – H.J. Heinz Company

HPQ – Hewlett-Packard

INTC – Intel

KO – Coca-Cola Company

MSFT – Microsoft

TGT – Target Corporation

WMT – Wal-Mart

WAG – Walgreens

For the beginning investor, understanding these symbols makes it easier to get into trading without feeling like you’re in a completely foreign world. You will be able to read stock tickers more easily and gain a better grasp on the process more quickly.

The SEC Changes the Rules

In the past, all an investor would need to do was look at a symbol in conjunction with its appended codes in order to figure out where a company’s stock was trading. But a move by the SEC in 2007 changed all that.

The SEC approved a rule that changed how companies that moved between the New York Stock Exchange and the Nasdaq were known. The rule allowed them to keep their three-letter symbols even though they moved between exchanges. At the beginning, the law excluded companies that only had one- or two-letter stock symbols, then after 2008, companies slowly began keeping their shorter symbols intact when making the switch. This trend started with CA, Inc., which traded using the symbol CA.

Knowing stock symbols is a great way to get your feet wet in the world of stocks. It will help you get accustomed to the companies that are trading and read the tickers more prudently.

Good Investments for the Conservative Trader

If you consider yourself a nervous stock trader, then go ahead and get in line. The market is not great right now – it doesn’t take a seasoned analyst to figure that out. That’s why now more than ever, protecting your hard-earned money by opting for only the most secure of investments is the best way to reduce your risk and grow your returns regardless of swings in the global economy.

You can choose from many different conservative investments in order to shelter your money from today’s economic fallout; you simply need to commit yourself to the fact that growth will take longer for these kinds of investments than it would for their riskier counterparts. Here are some tips for the choosing good investments for conservative trading.

Finding Safe Investments Means doing Your Homework

If you want to trade but you feel that you don’t really know the ins and outs of the industry, then you may want to call in some reinforcements. Meaning, you may want to consider an outside company or trading service so that you can place your money in hands that are more knowledgeable than yours.

A stockbroker can help guide you to conservative investments that will weather unsteady markets better than risky ones. You could also opt for a service such as E-Trader to help you along the way. You would not be as safe as you would with a traditional stockbroker, but you would be much safer than simply shooting blind and picking investments like you’re playing Russian roulette. That’s because sites like these have thorough online tutorials, help sections, and guides to help you every step of the way (if you actually read them).

If you plan on going it alone, then it’s risky, yes, but less so if you do your homework. For example, look at long-term trends for key indicators. You can also keep abreast of all the most current news and website updates about your companies of choice, and check out their annual statements before you decide whether to invest. And never invest based on a tip –that’s a surefire way to shoot yourself in the foot.


Should be an understood, but you’d be surprised. If you’re a trader and you have a good feeling about a company or two, don’t be tempted to sink all your money into stock with only a couple of entities. Instead, spread the love over a handful of large-cap, safe, growing companies with a good record of outperforming inflation and keeping the books in the black during recessionary periods.

Play the Market for the Long Term

If you’re planning on trading stocks, but you want to do it in the safest way possible, then keep in mind you need to keep your money in stocks for six months to a year at a minimum in order to shield your money from short-term ups and downs. Any shorter of a period, and you’re dangerously close to day trader territory.

Surviving the Recession with Your Investments Intact – Best Moves to Make

The Great Recession may be on a downhill slide, but we’re nowhere near the end. Everyone has heard horror stories of people nearing retirement who were forced to helplessly stand by and watch their 401k accounts plummet in a matter of months. Others saw mutual funds and other investment accounts bottom out as well.

These are scary times, and emerging from the recession with your investments intact is one of the highest financial priorities for American families today. Here are some ways to survive the recession without losing your shirt.

Diversify, Diversify, Diversify

Can’t say it enough. You’ve likely heard the expression “don’t put all your eggs in one basket” many times in the past, I’m sure. Financial advisors spout the old adage in droves, and for good reason. Diversifying your investments has always been sound financial advice, but the recession has transformed the idea from a recommendation to a necessity.

To come out of the most historic economic downturn since the Great Depression with your money intact, it’s imperative to mix up your investment vehicles. Think real estate, savings, CDs, bonds, mutual funds, and retirement accounts. Spread the love and you’ll weather the storm far more effectively than your “sink everything into the old IRA” counterparts.

Stick to the Right Stocks

If you’re still investing in the stock market during these trying times, that’s okay. Many people are avoiding investing in stocks altogether, and this strategy isn’t necessarily a great one. You can still invest in stocks during a recession; you simply need to ensure you’re picking the right companies.

Although no stock is 100% safe, there are some companies in which it’s just safer to invest your money in during a recessionary period. Stick to massive, established companies that have lengthy business histories. When you adopt this strategy, you’re essentially picking brands that have the goods to withstand long stints of market weakness.

Some characteristics to look for in the companies you’re considering include those that have strong balance sheets, strong cash flow, and only a small amount of debt. Established companies with strong cash flows are the safest stock picks during a downturn because they have a greater chance of riding out the storm until it passes and emerge stronger than ever.

Protect Your 401k

Taking some smart, defensive action is a great way to protect your retirement account from getting whacked when another recession rolls around. One personal finance blogger over at Money Green Life saw his 401k suffer a 50% loss in 2008, when the market took a 45% nosedive. He was determined not to make the same mistake twice, and in 2011, when the S&P 500 was down 8%, his 401k was enjoying a 0.1% gain for the year.

How did he do it?

First, he taught himself more about his 401k and the investments that comprised it. He shifted all his money into the money market fund, which, as he points out, is essentially 100% cash. His plan was to ride out the recession by sitting on the sidelines until the storm passed and reinvest his funds accordingly when things were stable once again. While this strategy may not work for everyone, it’s a testament to educating yourself, even just a little, about your investments. That, in itself, is the single best way to protect them from a recession.

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