2009 proved to be a year of net worth slashing for most people. Everyone was somehow affected by this meltdown of equities. A few, though, managed to make ungodly sums of money. According the Wall Street Journal, both David Tepper and John Paulson, hedge fund managers, made billions betting in the collapse of the market. These bets, also known as short selling and put options, enable many investors make money in a down market. Keep in mind that the techniques employed by these investors are were and are used by advanced traders.
I currently live in Virginia, am 28 years old, and have been investing for around six years. Towards the end of 2009 the market went up, but more than likely it is just a fluke. Anything can happen, though. Most working men, women, and families trusted advisers as to where to allocate their retirement capital. While the advice was not wrong, retirement accounts did suffer. What would have been a better option? The more it went down the more capital that should have been added. Doing this in a 401(k), 403(b), or IRA would have great tax benefits as well. In the long run it would have enabled the investor to buy more shares of companies in an index fund. An index fund is a great option for those that do not have the inclination to study the stock market on their own. There is a better way of doing it, though. That is to study the market yourself.
Investing in companies after doing your due diligence will always be the key thing to do. Just having someone point you in the "right" direction can be a dangerous thing to do. When a company that I had been tracking, handbag maker Coach (COH), went down to their lowest levels in a long time (February 2009, according to Google finance) it was time to back up the truck. What exactly did I do? I carefully studied the company and saw that the market was pricing it too low. When this occurs the investor should try their best and buy as much as they can in this situation. Now the company is up over 200%. Yes, you heard right. It is up over 200% and probably will continue to go up for the time being. Situations like these do not happen often, and it is imperative to act when it occurs.
I have never been a big fan of professional managed funds or having the right mix of assets for retirement. Anyone can, with some patience, study the market and learn as much as they can. An individual investor can certainly do a better job than a mutual fund manager because there is no pressure for them to succeed. As long as the market continues to offer undervalued but excellent companies then I will continue to do what I have been. My short and long term goals are to save and continue to invest. Now, if I only had added a few hundred-thousand dollars into my investment.
http://online.wsj.com/article/SB126135805328299533.html?mod=rss_Today%27s_Most_Popular
http://www.google.com/finance?client=ob&q=NYSE:COH
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