One note up front — I’m not an investment professional. All the same, I’ve been studying and investing in the stock market for years now, and doing OK for myself. Early on, I came up with a strategy that seems to be working. And working well. I call it the “Half-and-Half” method. (Or maybe it’s the “Third-Two-Thirds.”)
The Half and Half Theory Of Stock Investing
Do your research (of course). Now buy the stock you’ve been following. If you’ve done your work well, hopefully that stock will soon be rising in price — and you’ll be making a profit. And a nice one, at that.
Watch the stock carefully. When it seems to be at its 52-week-high, or close to it, sell enough (generally a third or half) to cover the cost of your original purchase.
Voila – you’ve just replaced your funds, so you can buy more! Your remaining stocks are “paid for,” and anything else they do from now on is technically ‘gravy.’ You can buy or sell more — it’s up to you. Or just buy and hold, as part of your strategy. I also, with few exceptions, buy stocks that offer a dividend. Holding them just means more cash in the coffers. (I also tend to wait until just after the quarterly dividend payout before doing a sell off — every dollar counts.)
This isn’t 100% successful — because not all stocks go up. But it’s worked surprisingly well in keeping my account on the positive side, and growing.
[Editors Note: If you are interested in learning more about investing, especially the basics, be sure to check out my eBook, 7 Investing Steps That Will Make You Wealthy.]
Cindy Brick is a personal property appraiser, judge and national teacher who loves to write about frugality and other personal finance topics. She has written six books and hundreds of articles, but often focuses on quilting, her teaching specialty. She lives in Colorado with her husband, two golden labs and a flock of very suspicious chickens. Find out more at Brickworks, http://www.cindybrick.com, or visit her personal blog: http://www.cindybrick.blogspot.com