The best stock investment strategy for 2010 and beyond will focus on a stock investment that is actually an investment fund. This investment strategy is easy to put into action and is the best way to simplify things for the average stock investor. You can do it the hard way in 2010 and beyond, or you can learn about stock investment funds and do it the easy way.
Many people try to pick the best stock investment by pouring over the list of equities (stocks) traded on the major exchanges. That gives you about 5000 choices. Others try to pick the best investment fund from the equity category offered by a specific mutual fund family. This limits your choices, but also your opportunities; since few families offer a wide array of specialty or sector funds that specialize in a particular industry.
The best stock investment strategy for 2010 and going forward is to focus on industries and sectors that have been out of favor and will eventually be top performers when a real economic recovery takes hold. The economy is not out of the woods yet, as the jury is still out in regard to our financial system and the big banks that created the financial crisis. Unemployment is still at unacceptable levels and the real estate market is still in a funk. Where will the big profits be when the financial storm eventually passes?
You'll find your best stock opportunities in the sectors that were previously beat up severely. Now, let's talk investment strategy. You will want to have a primary equity holding in the form of an equity investment fund that moves with the market. That's a lot easier than picking individual issues and putting together your own portfolio. You can buy into the general market by simply buying shares in an ETF (exchange traded fund) that tracks a major market index like the S&P 500.
In one simple transaction you can buy shares in SPY which tracks the major market index that the professionals follow and use as a benchmark, the S&P 500 Index. If the market is up you make money... if stocks are down you lose like most everyone else. Then, you add investment funds (ETFs) to your portfolio that track industries or sectors that were beaten up the worst when stocks in general were falling. Avoid those that have already reached new highs.
For example, the gold sector was cold for years before it took off and gold prices hit all-time highs. It's too late to get rich here in 2010 and going forward for a few years. On the other hand, the real estate industry has been hammered in recent times. Stocks and funds that invest in that sector lost up to 90% when the financial crisis unfolded, and are still way under water. Your best stock investment in 2010 or in the years that follow could very well be an ETF that tracks the real estate sector. Symbol URE is one such fund, and gives investor 2 to 1 leverage in the process.
If you are new to the world of investing, your best stock investment strategy is to focus on the investment funds (ETFs) that trade on exchanges and offer just about any category of investment conceivable. For example, how else could you invest in equities, bonds, commodities, or foreign securities without years and years of experience? Go to your broker's site or other financial site and get familiar with the various categories of ETFs that are available. Or search "ETF" on the internet.
I've been an active investor for 35 years. Today, 90% of my investing activity is in exchange traded funds. I like to be able to play gold, real estate, and other sectors the quick and easy way without the risk associated with the likes of commodities contracts and options contracts.
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