1. Start Now:
It is never too early to make your first investments, not even now with the recent changes in power politics in Washington. While investment gurus might suggest you to access your risk and know everything regarding the market before buying that first stock, this is often a vague concept. Not a single person in the market knows what will be the price of a stock tomorrow. It is almost impossible to predict the market price for a particular time in future. Being close to the future stock performance, however, is entirely possible. The stance of a value investor ignores short-term roller coasters and micro events. Rather, focus on a business that has long-term potential. Warren Buffett is a legend at picking stocks that will likely be as important as they are now. Shaving products, underwear, Coca cola to name a few. It is hard to imagine a future without any of these. Regardless of who is president, people will still be buying these products.
2. Autopilot Trap:
There are many Stock Advisors available in the market today. While all of them show their impressive market returns beating S&P returns, only a few of them are real. I honestly think it is good to use a premium service to sort the stocks down. However, the problem with this is that if you follow someone else’s portfolio or allow anyone to handle your portfolio, you have hardly any say on the market performance. You certainly don’t want to hand over the money you saved all your life to someone else and not know what they are doing. It also does not mean reading The Wall Street Journal from Start to Finish. A good approach can be to use a highly rated portfolio service to sort the stocks and use that to make your judgments. Autopilots are dependent on stocks historic performance. When new things are coming up politics, you might want to look forward, keeping the history in mind. Another recommendation from the book “The Intelligent Investor”, is to put your money in a low-fee index fund. Something like the Vanguard and keep your money in there for a while. This takes a cross section of the American economy picking the best stocks.
3. Preparing for Trump Administration:
In one of his campaign announcement, Trump mentioned,"Be careful of a bubble because what you've seen in the past might be small potatoes compared to what happens." He suggested that the stock market is currently a big bubble and crashing very soon. The media's claim has gone haywire and they look pretty dishonest with the Trump making his way to the presidency. Also, analysts were of the opinion that a Trump presidency would be bad for the market. When FBI chief said FBI would reopen the election running Hillary Clinton’s case; the market did feel Trump would win and go down. The markets didn’t react the same when Trump won. Awaking Trump's presidency, stock markets went up in the hope that he would not only make America Great Again but the stock market also. However, with the December Fed rate hike on Pipeline, this trend might not continue forever, and millennials should make only solid bets. Even a small hike can potentially crash the market. Also, a sectoral performance like a Private prison, Security, and Defense can be closely watched as they can have excellent potential under Trump's presidency. Private prison are to benefit as before deporting any illegal immigrants under Trump’s plan; they have to spend some time in jail for an average of 33.5 days at the cost of $118.88 per day per bed, beds such as those provided by #GEO Geo Group. Some stocks like AAPL, who have huge cash reserves abroad now finally may be able to bring back their money to the US, on account of Trump’s promise of no business of any size would pay taxes more than 15% and his plan to avoid double taxation.
4. Don’t risk altogether:
Being confident about your decisions is one thing, making a sustainable growing portfolio is another. One should hold at least three or more stocks across multiple sectors for a minimum investment time of 3 years. The risk of a diversified portfolio is less than the individual stock in a portfolio. Diversification, however, is not a panacea. Financial assets are risky and diversification can even though reduce risk but cannot eliminate it.