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Rocket Investing: Stock Market Research Advice
The stock market is not a black hole. People come out of it
successful, business savvy and rich! Here are 5 things you must
remember to conquer the investing black hole:
1. Be resourceful. The key to investing is knowledge: know
anything...
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Investing in Stocks and the Game of Monopoly
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Turning Bad Debts into Good Debts through Investing Fundamentals
If you've ever earned enough money to put some aside, like most people you've probably invested it with an eye toward security – since, perhaps, you can't imagine yourself ever getting rich. "Most people dream of becoming rich, but it isn't their...
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Real Estate Investing - Writing Killer Postcards to Attract Motivated Sellers!
So many of you have been telling us that you're ready to get started investing, but "you can't find any deals! and what are the steps and secrets to finding great deals?" Some of you have even written asking us if there still ARE any deals left…...
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Is it true that regular index investing performs good result with low risk?
There are many mutual funds and ETF on the market. But only a few performs results as good as s&p 500 or better. Well known that s&p 500 performs good results in long terms. But how can we convert these good results into money? We can buy index fund shares.
Index Funds seek investment results that correspond with the total return of the some market index (for example s&p 500). Investing into index funds gives chance that the result of this investment will be close to result of the index.
As we see, we receive good result doing nothing. It's main advantages of investing into index funds.
This investment strategy works better for long term. It means that you have to invest your money into index funds for 5 years or longer. Most of people have no much money for big one time investment. But we can invest small amount of dollars every month.
We have tested performance for 5-years regular investment into three indexes (S&P500, S&P Mid Caps 400, S&P Small
Caps 600). The result of testing shows that every month investing small amounts of dollar gives good results. Statistic shows that you will receive profit from 26% to 28.50% of initial investment into S&P 500 with 80% probability.
We must note that investing into indexes isn't risk-free investment. There are results with loosing in our testing. The poorest result is loosing about 33% of initial investment into S&P 500.
Diversification is the best way to reduce risk. Investing into 2-3 different indexes can reduce risk significantly. Best results are given by investing into indexes with different types of assets (bond index and share index) or different classes of assets (small caps, mid caps, big caps).
You can find full version of this article with full results of our tests here: http://fplab.com/node/116
About the Author
Alexander Korablev is head of FPLab Team.
http://Fplab.com is trainings and courses catalog for traders and investors.
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