To make things happen in prospective look at the 10-year period from 1999 to October 2009, and was on the stock market, as the performance indicator, the most popular in the world, measured by the Dow Jones Industrial Average (DOW).

The Dow first hit 10,000 in 1999. In October 2009 there were 10 000 times. The stock market took investors for a wild ride that it was nowhere for 10 years. Investment camp was a bad deal, and was frustrating for most people.

When you invest in stocks and want to relax a little, it’s time to take a major decision with regard to investment strategies. How will you play the market? You can play as a short term trader or speculator. On the other hand, you can simply buy stocks and hold them. And then there is a third choice.

Few people really make money when investing in stocks, the short-term to one basis. Merchants have their good days, but the benefit of a few market fluctuations consistently. In addition, the short-term speculation is at least part time, time, effort and experience.

The other extreme is the buy-and-hold investment strategy simple and requires almost no effort. This investment strategy has generated long-term returns in the stock market by 10% per year in the long run, for the last 50 years and older. Not so in the years 1999 to 2009. For ten years, investment in equipment easily produces a little more acid indigestion for investors.

I suggest you start a field goal and press the mark in the middle. Do not try to make money in stocks with short-term speculation or outright purchase, cross your fingers and hope for the best.

There has always been cyclical bull market and bear market and the markets have always been at the very time to time. Do you recognize this and pay attention to stock prices. By checking the DOW only once a week, you can get an idea of ​​what happened in the world invest in the stock market.

When you see the extreme price movements, it is time to act. How can we extremes? Familiarize yourself with the historical data on stock markets. A good start: a long-term chart of the Dow.

For example, in 2000 it was clear that stocks have gone too far and too fast. The only thing that keeps going up was their greed. Under the feeling of the picture, could see every rational being that the stock had gone to the extreme. Doing the right thing, than a little money on the table.

Or was look at the equity investment scenario in the spring of 2009 with the Dow with 50% in a few months. Was this a time to step up and buy shares, or who we know the world was over?

Do not look at the stock market as rocket science or anything complicated that you do not understand. Learn the basics and follow the market at least weekly, or quarterly. Your investment strategy: the reduction of stock, where it seems that they went to the extreme. Come in and buy when there is blood in the streets.

A retired financial planner James Leitz has an MBA (Finance) and 35 years of investment experience. For 20 years he has advised individual investors directly with them to help them achieve their financial goals.

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