Da Bulls and Da Bears: Who Are You Running With?

Dave Ramsey's Investing Minute Having trouble viewing images? Click here. September 6, 2011 Da Bulls and Da Bears: Who Are You Running With? The Tip: Don't let the stock market's swings dictate your investing strategy. Instead, rely on a steady, consistent plan to build wealth for the long term. Investors have watched the stock market do some wild things recently. Remember those triple-digit Dow Jones Average swings? All that volatility separated investors into two sides: the bulls, who saw the market's gyrations as a buying opportunity, and the bears, who were preparing for the end of the world. Which type of investor are you? Da Bulls The bullish investors were snapping up "discounted" stocks. Fund managers spent billions to add to their stock holdings, and legendary investor Warren Buffet said, "The lower (stocks) go, the more I buy." That kind of strategy works for experienced, professional investors who make it their job to know when a stock is a good buy. But it isn't a good example for the average investor. Dave always says you should never try to time the market, and he's usually talking to investors who want to dump their funds in a market decline. But his advice works both ways. Don't empty your bank account to buy up investments that are "on sale" either. Da Bears On the other side of the market are the bears who bailed on $14 billion in their mutual funds in just one week, turning to money market funds, Treasuries and precious metals. They listened to the 24/7 reporting of global economic issues and "expert" analysis of the stock market's every move. No wonder the bears sought "safe havens" for their money. The problem is, "safe" investments are usually never really safe, and their rates of return rarely even keep up with inflation. So if you shouldn't be a bull or a bear, what should you be? Be the Tortoise Slow. Steady. Consistent. Some may say boring. But this is the best way to build wealth: Get a Plan – Know what you're investing in and why. Be Consistent – Know how much you're going to invest and when. And stick to it no matter what the market is doing. Have a Long-Term View – Knowing the money you invest is for the future will keep you from focusing on what the market is doing today. Another key to success as an investor is working with a financial advisor who will teach you how to make your own investing decisions. Dave's Endorsed Local Providers (ELPs) are investing pros who agree with Dave's philosophy and are ready to answer all your investing questions. Contact your ELP today! Share this:

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