Lux Investing
Value investing or Trading?
I'm 14 years old and i'm an advocate for corporate Finance. I have read many books such as Value Investing for DUMMIES, The intelligent Investor, Reading Financial reports for DUMMIES, and even some tutorials on Investopedia.com. Finally, my question is are Value investing ways outdated and our we in a makret of pure trading. It seems that everyone is turning to trading and quick capital gains, but I have a love for the ways of Value Investing and I beileive I could be a very successfu Value Investor. Should I take on Trading techniques because it's the popular technique or is there still money to be made in Value Investing?
Public Comments
- I think I should be talking to you about what I should invest in. You are so young. You have the great benefit of letting compound interest, dollar cost averaging and dividend reinvestment work in your favor. My goodness, you could literally be retired and wealthy by the time you are 45 years old, if you started now. Your first option should be to fund fully a retirement account. If you have done this, or you wish to wait on the retirement fund, then one of the best things you can do is open a DRIP Plan. They are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street. The best part is you get solid annual returns from well-known, safe Blue Chip companies like: McDonalds, General Electric, Pfizer, Walmart, US Bancorp.......etc........ They are inexpensive to start and maintain, and your dividends are reinvested for free. They are perfect for small investors, as well as big investors. They are safe and allow you to not care about whether the market is going up or down. To answer your question specifically, I am watching the Banking Sector and the Homebuilder Sector very closely. I think there are many value stocks in these sectors.
- You should do what you are most interested in which would be value investing. You should NEVER take on any endeavor just becasue it is 'popular.' That said, value investing is bit of a redunancy. When you are investing, you are ALWAYS looking for value! Trading is either speculating or just what it is, trading, with a whole different methodology for seeking profit. The banks are the ones making the big bucks off your trading by charging commission or market makers making money on the spread with their profits often dependent on the volume they trade with little concern for the financial health of a company. There will always be lots of money to be made in value investing. That's like asking if there will be money to be made in business. Except the beauty of investing is that you let other people do the hard work, you just have to have the capital and assume some of the risk. Hope this gives you some insight.
