There has been a handful of technologies that have expanded human liberties and luxuries throughout history, from the oral tradition, the invention of paper, the printing press, radio, and the internet. Unlike in history, people are less inclinded to put their money into property. This can be because they need to stay mobile for their work but often it’s because they cannot afford a down payment or other financial reasons.
One of the best ways to make your money work for you is to invest in stocks. Robinhood has made investments work for me while I have saved. Following a few rules lead to my success:
- Invest in what you know
- Buy when there’s “blood in the streets”
- Have an exit strategy
Invest in what you know
I love the sciences but I know where my limitations are. For example, I know computers rather well, astronomy better than average, and biology… well, let’s not talk about biology. I know my limitations and where my knowledge and skillset excel. Therefore, my money goes into various tech stocks and nowhere near biopharm.
Maybe you know an industry or market really well. You can buy and sell ETFs that track it. You can find ETFs for robotics, the defense sector, artificial inteligence and even legal cannabis.
Buy when there’s “blood in the streets”
This refers to when people are massively selling off their shares for one reason or another. Often this is occurs when poor news comes out about a company or sector. If you know the stock will recover then don’t hesitate to buy. AMD recently dipped below $10 this year and is now trading at over ~$13~ $16 per share, a gain of over 30% in a few months.
Selling puts will let you average into a position while collecting a premium on the contract.
Have an exit strategy
You may be investing in something you don’t ever want to remove your stock from and just collect dividends. However, even in this case it’s a good idea to have an exit strategy. You never know the future with 100% accuracy.
A few simple strategies include:
Bought 100 shares at $10/share: WHen the value of a share reaches $12, sell 90 shares to recover 100% of the initial input. Allow the remaining 10 shares to apprechiate.
Bought 100 shares at $10/share: Sell a call at $12/share and collect the premium. If the call is not exerciesd you make some money, if it’s exercised you make more.