Today I am going to tell you what my investment plan is. I got the idea of saving and investing from a book I read called "The Richest Man in Babylon." In this book, the wealthy man talks about saving one coin for every ten coins that you earn. Once you have enough coins, you must invest the coin in an industry you understand. So decided to implement these principles into my own life.
After reading this book, I started to save the ten percent of what I earned. In doing so I finally saved enough money to start investing. However, I realized that I didn't have an "industry" that I understood enough to invest in. I didn't have enough of an understanding to properly invest my money. So I took charge and I started to educate myself in the stock market. After reading some books and doing further research, I was convinced in investing in the stock market. Now I only buy stocks that I find to be undervalued and pay a good dividends to make profitable gains.
So I devised a plan for five stocks that I found to be undervalued and pay good dividends. Every four months, I take some of the money that I have saved and place it into these five stocks. This makes my dividend grow which means I always have more money to invest with in the four months. When a stock has hit it value, I will sell that stock and look for one that is undervalued. Overall, this plan has worked very well for me. On average it has made 20% a year within the last 8 years. I had only one year lost money and that was last year. I lost about 8%, but that was inevitable for everyone investing with how the markets were last year. But that is the way the market is for everyone. Gains and losses are needed, but it doesn't have to define your success. Now I am making money again with patience. Patience is key.
That's all for now. Until next time, always trade your plan.
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Dustin Pelletier Head Trading Coach at Trading Gains.