- November 1, 2016
- 0 Comments
Everybody wants to build wealth in the stock market, the problem is that they don’t know how.
Random stock picks aren’t the answer, though picking stocks does work. How hard is it to simply look at your bank statement and invest in the places where you spend the most money? Starbucks, McDonald’s, Home Depot, Facebook, Google, Amazon, and Apple are businesses people frequently (almost daily) patronize – yet they seldom invest in the stocks of these companies.
For one they think they’ve missed the boat. They don’t believe that the past success of these companies can be repeated in the future. So they go looking for the next Facebook or Starbucks. Good luck.
Another reason is the price of the shares of successful companies. Facebook, Amazon, and Google all trade at $100 or more a share. Psychologically investors have a hard time buying shares priced a $50 or more. We could get into a conversation about how the price is not indicative of the value of underlying company, but let’s be honest here. If one company is selling at $25 a share and the other at $50, the $25 price seems cheaper. P/E ratio be darned.
Perhaps the most damning reason investors don’t build wealth by picking and owning the stocks of great companies is that they don’t know how to simply get out of their own way. What I mean is they’ll buy a great stock like Apple and worry about it day and night as the stock doubles and triples in value. At some point they can’t bear the fact that their investment is performing so well and therefore they sell too early to truly reap the rewards of owning a great stock. This scenario was repeated by Apple investors the world over.
Index funds aren’t the answer either. Not because they don’t work, they do, but because of how they work. Index funds like their mutual fund cousins actually dilute the performance of great stocks by forcing you to own a lot of stocks that aren’t so great. In other words if you surround Michael Jordan with a bunch of scrubs you negate the impact of having MJ on your team.
So what is the answer? You need a system that combines the benefits of owning index funds with the power of owning great individual stocks. A system that is designed to give you double and triple the daily return of the stock market. Wilson Wealth specializes in an investment process that delivers on these goals.
If you are interested in seeing how this can help you reach your goals visit: www.wilsonwealth.com to learn more!