Adopting Ben Franklin’s strategy of believing “none of what you hear and half of what you see” may be good practice, but his financial axiom “a penny saved is a penny earned,” while true, is incomplete.
Today’s investors need a bit more guidance than that.
However, it can be difficult to find advice you can trust. Many investors, particularly during the Great Recession, suffered as a result of poor stock picks and unsound guidance.
That’s why Wealthy Retirement is committed to offering expert market insight – but it’s also true that many of our readers have sound wisdom of their own.
For that reason, this week, we asked Wealthy Retirement readers about the best pieces of general investing advice that they’ve ever received.
Some readers’ responses were the kind of feedback we love to hear…
| “Marc Lichtenfeld… Dividend stocks!!!” – Wealthy Retirement reader
“Selling puts, by Karim Rahemtulla!” – Wealthy Retirement reader |
(Four readers all separately wrote in to express their love of put selling. If you’re unfamiliar with the process, here’s a quick guide.)
Other respondents shared stories of success from acting on early stock tips for companies like Microsoft (Nasdaq: MSFT) and IBM (NYSE: IBM). Still more responded with values that are cornerstones to our investing philosophy, like “pay yourself first,” “don’t time the market,” “dollar-cost average” and “position size.”
Using these strategies – along with others, like setting trailing stops and taking advantage of Perpetual Dividend Raisers – many of our respondents have found financial success while avoiding unnecessary stress and enjoying life…
In fact, the responses we received from our readers were so valuable that we decided to poll our Wealthy Retirement experts to get a sense of their sources of inspiration as well.
Marc Lichtenfeld, Chief Income Strategist
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“Markets go up over the long term.
This was reinforced by research I conducted for my book Get Rich With Dividends. I looked at rolling 10-year performance since the 1920s.
There were only seven out of 91 instances where the market didn’t go up over 10 years – and those seven periods were during the Great Depression and Great Recession.
In other words, you had to sell in the depths of historic economic collapses not to make money.”
Several respondents indicated that this wisdom from Marc is one of the best lessons they’ve learned.
In addition to proving the power and reliability of dividend investing (particularly in Perpetual Dividend Raisers), the performance of the market over the long term is reassuring for investors who can become anxious in the face of volatility.
Steve McDonald, Bond Strategist
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“Buy quality, and leave it alone.” – My father, 1970
(Note: This weekend, we wish a happy Father’s Day to any fathers reading today’s letter who, like Steve’s father, have shared their investing wisdom with their children.)
Steve has often warned about the dangers of panic-selling into a falling market. His mastery of the bond market and commitment to a buy-and-hold strategy have helped his readers capture consistent income while still getting sleep at night.
As Steve has written, most of “the little guys'” losses are self-inflicted through panic – so investors who wrote in championing his ideals of “paying yourself first” and keeping calm are already a critical step ahead of the game.
Karim Rahemtulla, Options Strategist
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“Invest in what you know and understand. Speculate in what you don’t know or understand, and know when to cut your losses.
Too often, people do the opposite… they invest heavily in what they don’t know or understand.”
Karim recently launched the free e-letter Trade of the Day in part to restore the ideal of “smart speculations” – taking on small risks and using calculated strategies to earn significant returns.
It is critical in options trading to understand the process and market movements thoroughly, and long-term investing is most successful when investors have done their research.
However, Karim is right – too often, investors are tempted by high yields and are pessimistic in the face of a downturn.
One of our readers in particular has resisted this temptation. Overcoming personal hurdles and learning from others who withstood the Great Depression taught them that remaining hopeful and continuing to learn is most important.
After sharing the story of their journey to retirement, they said the following…
| Indeed, it’s been a long road since I am at that age now just starting “my” retirement… I continue to learn something new every day. It is one aspect of my new life, and it is really work and not something to be taken lightly: managing my own finances for income and wealth to make it last the rest of my life and leave something (though not much) to pass down to my grandchildren and great-grandchildren. – Wealthy Retirement reader |
All of the advice our experts share is designed to build lives enriched by more than just a bank account balance.
Thank you to our readers for sharing your wisdom. We look forward to hearing more about how you’re putting your investing knowledge to the test to optimize income, reduce risk and achieve a truly wealthy retirement.
Good investing,
Mable
P.S. Didn’t get to share your thoughts in our survey this week? Let us know what concepts and learning experiences have been meaningful to you in the comments!