Want to survive the year 2001? Then get out of the chat room and think twice about putting all your money into high-technology stocks. Markets were up at the start of 2000, riding a wave of overvalued tech companies, and the result was a substantial downturn, with even the indomitable NASDAQ off by almost 40 percent at year's end.
To glean a profit in the 21st century, you may want to apply some 19th-century know-how. Research companies carefully, and choose those with real value rather than real hype. Overlooked, dull sectors like utilities, aerospace, pharmaceuticals, and healthcare are often the most reliably profitable, and they can add some essential diversity and safety to tech-heavy portfolios. According to experts interviewed by THAT MONEY SHOW's Betsy Karetnick, they are also the most likely to turn a profit in the coming year.
Don't believe most of what you read on the Internet, especially in chat rooms and investing forums. There are a lot of unscrupulous individuals out there who would like to influence your investment decisions with false tips. Their so-called "pump and dump" schemes rely on investors like you to respond to hot tips by running out and buying a stock. When a lot of investors start buying a particular stock, the price jumps, and the con artist sells her shares, causing the price to plummet. By the time you realize what's happened, you've lost a good part of your investment money.
Forget being a daytrader. Most individuals do a lot better investing for the long haul. Of course, we've all heard of the lady down ther block who quit her job because she was making so much money daytrading online. Well, last month, that lady declared bankruptcy. Your investments, however, are probably still safe and growing at a respectable rate, even if 2000 was a bit rough on them. With the help of a good advisor, and vehicles like IRAs and Mutual Funds, your money can grow quickly, and safely, and you'll never have to quit your job to take care of it.
There's no such thing as easy money, even though it looked like it for a few years on Wall Street. If you plan to act as your own investment advisor, do your own research, and handle your own stock trades over the Internet, be serious about it, and don't expect a handful of quick deals to mint money for you. The stock market is not a friendly game of cards, and there's no guarantee of making any profits from it. A thousand different factors can influence the strength of the overall market, but the companies you choose to invest in must be capable of weathering any market volatility. If not, you've only got yourself to blame.