It’s Stocks, Not Markets, that Bring Investment Success
It’s Stocks, Not Markets, that Bring Investment Success
by Gabriel Nijmeh
If you are fairly new to investing and looking for some guidance
or if you are seasoned investor, let me introduce you to NAIC.
National Association of Investors Corporation (NAIC) is a non-
profit, tax exempt organization whose membership consists of
investment clubs and individual investors. Founded in 1951, the
mission of NAIC is to provide investment education, information
and support. They prescribe to four basic, yet timeless
investment principles:
1. Invest regularly, regardless of the present outlook for the
economy or stock market.
2. Reinvest all earnings, letting the power of compounding work
for you.
3. Discover growing companies so that your wealth can grow as
their sales and earnings grow over the years.
4. Diversify your holdings, and don't put all your eggs in one
basket, regardless of how carefully you watch that basket.
The late George A. Nicholson, Jr. CFA - father of the modern-day
investment club movement, gave these principles to a good friend
in 1939 and told him that if he followed them he would make the
money he needed to start his own business.
"I never thought these principles would be so aggressive,"
Nicholson once told Better Investing editors. "They were meant to
be defensive, to protect investors from losing money. They turned
out to be quite offensive, too." He enjoyed comparing this
approach to investing with his college football experiences. "The
best offense is a strong defense."
I can attest from own experience of such a disciplined investment
program. For the most part, I have invested exclusively in
mutual funds because I never had the time or experience to
properly research and analyze individual stocks. One day as I
was reading through the business section of my local newspaper, I
came across an organization called the Canadian Shareowner
Association (CSA) which piqued my interest. I started researching it a
little more and as a result of my research stumbled on NAIC's
web-site, which then lead me to learn about Warren Buffet and his
style of disciplined investing. The Canadian Shareowner
Association follows a lot of the investment principles of the
American based NAIC.
Membership to CSA is inexpensive and the educational materials
are very informative and drive home the above noted investment
principles. For only $79 a year, I
decided to join the CSA which
includes a bimonthly magazine with two company stock studies,
market outlook, financial planning and more. In addition, I have
access to the low cost investing program where I have set-up my
investment plan. The great thing about such a program is that
you can buy shares in any dollar amount from such companies as
Johnson and Johnson, Microsoft, Pfizer, Wal-Mart. Your money is
pooled with other investors and trades are executed during
specified trading windows. For example, if you invested $50 in
a stock that is trading at $30, you will own 1.67 shares.
Another great feature is that dividends are automatically
reinvested allowing for compounded growth.
Whether you join an investment club or are a self-directed
investor, you work at your own pace. Learning how to analyze
companies using the stock selection guide which is a tool that
was created over fifty years ago and is organized in five
sections. The section guidelines will help you determine if the
company would be a good investment by:
1. Evaluating historical sales and profit growth and estimate
future growth
2. Analyzing historical management performance
3. Analyzing historical profit and price data
4. Evaluating risk and reward and;
5. Determining the potential return on an investment.
The software is easy to use and you can download company profiles
with historical information thus saving you data entry effort. As
company financials are released quarterly and yearly, you just
enter the information and keep an eye on performance.
For more information, you can check our
http://www.better-investing.com or http://www.shareowner.com to
find out more information.
Finally, if you want to be a successful investor keep in mind the
following:
1) A focus on the long term.
2) A discipline to apply in building and managing a portfolio.
3) Patience to persevere.
Bear or bull markets, a sound, disciplined investment strategy
will bring you investment success over the long-term.
About the Author
Gabriel is the editor and webmaster of The Money Advisor -
http://www.the-money-advisor.com. He believes that everyone is
capable of controlling their financial destiny with the right
combination of rich thinking and smart action. The Money
Advisor, a knowledge network of people, articles, tips, e-books
and ideas about making money, saving money and building wealth!
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