Nobody likes bad news, but sometimes in the stock markets, it’s inevitable. It’s also natural — markets and economies go through cycles of boom and bust. For every bull market that we enjoy, there’s likely to be a bear lurking somewhere in the future. Because of this, it’s important to have a plan in place in case of a downturn.
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Back in 1952, long before everyone and their mother could discuss the benefits of adopting a holistic approach to their personal health, economist Harry Markowitz introduced theory recommending a holistic approach to one’s financial health. Known as Modern Portfolio Theory (MPT), it’s just as popular today as it was back in 1990, when it won Markowitz a Nobel Prize.
In recent years, two relatively new investment markets have sprung up. It’s now possible to invest in both student loans and small-business loans. Both investments present opportunities. But they also represent what are probably the two riskiest markets to invest in. Why are they so risky — and are these investments worth the gamble?
I distinctly remember the first adult conversation I had about getting started with investing. I was 25, making about $18,000 a year and still carrying tens of thousands of dollars in student loan debt. One of my former college roommates and I were walking around New York City talking about the new life stage we were in. We were two years out of college, feeling caught between childhood and adulthood.
One day, you fire up Google Finance to check on your favorite investment. Maybe it’s Netflix (NFLX). You see that the share price is up $2 or down $10. Maybe even both within a one-hour period. Why is that? Who decided that? You did. Well, you and a few million other people, including me.
Uber… Spotify… Airbnb… These companies offer super-popular services and could make great investments for your portfolio. But there’s just one problem: They haven’t had their IPOs yet. In fact, the entire IPO calendar for 2017 is unusually bare. Why is this?
This year, you had to be living under a rock if you didn’t hear about social media company Snap’s (SNAP) stock market debut. When the company held its initial public offering (or IPO) on March 1, 2017, it raked in $3.4 billion. This made Snap one of the tech industry’s biggest IPOs — ever. Very early-in investors could have made millions of dollars from Snap’s IPO. But are IPOs worth your time and money?
Pure and simple, it’s the most trusted mantra of the investing world: Buy low and sell high. But when it comes to buying low, how do investors find the best opportunities? Sometimes Wall Street hands them to you on a silver platter.
Did you know you can get paid for investing in stocks? I’m not talking about just the profits you make when you sell your shares at a higher price than you bought them for.
Disclosure: Investor Junkie may be compensated through the links in the article, but the opinions expressed are our own. After a hiatus from book writing for more than 20 years, Tony Robbins released Money: Master the Game in 2014. With this book, Tony coaches you through a step-by-step process on how to win at the game of money and investing. Tony is perhaps best known for being a motivational speaker, a term he dislikes. He prefers “personal coach” and has used that term since long before it became a popular catchphrase.