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Time management

Money management

Building credit

True, if you do not know what you are doing in the stock market, putting all your money in savings is the wisest thing to do, but you will never reach your financial potential unless you master more risky investments like stocks.

You need bank savings available for emergencies, but these types of accounts do not grow your money as the stock markets can.

Ignore the advice of people who have lost "50 percent", "70 percent", or whatever, who say you should stay out of the markets. Dr. Voyageur is sorry for these loses, but these people simply did not follow sound investment management. To stay invested in stocks that were losing so much value was just not using common sense. To stay invested in just one type of stock was not using common sense. To keep on investing full speed ahead when there was no end in sight to a major market downturn was not common sense.

Learn what to do, as suggested below, and you will not make these types of mistakes.

To start off, you have decisions to make, which include:

Whether or not to use an advisor and, if so, how to pick one. If you choose to do your own investments, what level of service do you need from brokers.
The balance you need among stocks, cash (easy to access savings), bonds, and other investments.
Whether you buy individual stocks or mutual funds
What mutual funds or stocks to buy
When to buy them, and
When to sell them (This is too often not considered)
Picking the right investment retirement tax shelters

The Road to Wealth: A Comprehensive Guide to Your Money--Everything You Need to Know in Good and Bad Times by Suze Orman, highly recommended elsewhere on these pages, gives great help with making many of these decisions.

On this page, however, we concentrate on buying stocks to dramatically increase your wealth.

Investing in the stock market

Libraries are filled with financial advice, often of dubious value. Other advice takes an extreme view, discarding any value in other approaches.

You need the discipline of a system, but you need balance in your system.

Stock investors tend to divide themselves into two groups.

Purely technical investors, the "chartists", believe taking the time to study fundamentals is a waste of time, as the behaviour of buyers and sellers as shown by charts tells all. Many fundamentalists, on the other hand, consider study of charts nothing more than voodoo.

For the inexperienced, fundamental investing means basing decisions on analysis of information available from company reports, the government, other companies in the field, consumer confidence indexes, background of management, long-range weather reports (if applicable), and factors such as visits to stores. Technical means analysis of stock price trends, the "charts".

An excellent introduction to both extremes is the "Bulls & Bears" show on the Fox News Network, available by satellite or cable in many countries on weekends. Here we witness good natured arguments from four points of view, purely technical analysis, purely fundamental analysis, the market is going down, and the market is going up. The show is fun to watch and both new and seasoned investors gain valuable knowledge. Guest quality is outstanding.

Investors Business Daily

In Dr. Voyageur's opinion, you must combine the good from both fundamental and technical approaches to achieve maximum results.

This is why he likes the American newspaper Investors Business Daily (IBD) so much.

Easily accessible to inexperienced investors, IBD not only gives financial news, it teaches sound investment. Check it out. Pay special attention to its stock rating system, the "how to invest" articles, and the featured companies.

Investors Business Daily maintains an Internet site, http://www.investors.com as an adjunct to the paper. Subscribers may access powerful on-line stock screening tools on this site.

However, anyone may utilize the excellent and free IBD on-line investment course and the useful "Ask Bill O'Neil" feature.

Dr. Voyageur suggests that you first buy (or borrow) and read William O'Neil's How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition before signing up for a free two-week subscription to the IBD newspaper available on its website. William O'Neil founded Investors Business Daily, remains its publisher, and is considered one of America's most successful investors.

Unlike so many others, O'Neil emphases control of loses as a key to building wealth. He stresses piggybacking on upmarket trends. He emphases the "new economy", the exciting new companies that have begun to attract large investors and the old companies undergoing profound positive change.

Learn what's in O'Neil's book, study the extensive material available on the IBD website, and read IBD thororoughly and you will begin to invest wisely in a relatively short time.

All this is done in a format appropriate for both complete novices and for the most experienced investors.

Expand your knowledge

As time goes on, expand your depth of knowledge by reading Canadian Business, Forbes, the Financial Times, the Wall Street Journal, Inc. Magazine, company reports and proxies, etc. Also, tap into the free features of Yahoo Finance and the combined CNBC and MSN Money site.

On the other hand, your investment system should be immune to the often inane comments posted on the many stock message boards, which you should avoid until you know what you are doing. Emotion and heresy does not belong in a successful investment strategy.

Value investing

You should also study the highly successful "value investing" tactics of Warren Buffett, which for years made him the wealthiest person in the U.S.

Frankly, Buffett's long-range outlook hasn't produced during the last several years, where you would have been far more successful following O'Neil.

Sitting atop one of the largest fortunes in the world, however, Buffett easily casts aside short-term setbacks. You can't ignore this man.

One of Buffet's suggestions that Dr. Voyageur uses all the time is to invest in what you can experience.

You know product quality from first-hand use. You know how you have been treated by customer services. Whether products arrive on time. How well-trained and competent and friendly are those who serve you in stores. Products selections. Out of stocks. Cleanliness. How crowded is the mall for this time of year. How warm or rainy it has been. And, on and on.

Consequently, you're on your way to making money!

The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham with a preface by Warren E. Buffett gives an excellent introduction to the techniques Buffett has used so successfully.

Best wishes for great success!

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