I always thought the stock market was pretty easy to understand: it was similar to backing a horse in a race. If it wins, you get money; if it loses, you lose what you have.
I’ve always understood that if you have money in the stock market, you don’t sell when the value is heading downhill, and you don’t buy when it’s going uphill. Rather you do the reverse. I got this piece of wisdom from a book many years ago and it’s stuck with me.
Plainly I’m a bit naïve when it comes to stocks and shares because there are always new terms coming my way (even when I’m not looking for them) that I don’t understand at all. Yet the even the Motley Fool says you won't find a simpler strategy than buying and holding quality stocks. Isn’t that what I’ve just been saying? Don’t back the losers, back the winners. Yes, you’ll lose occasionally, but not often.
The other thing is, sit on your shares. According to another piece of market wisdom, shares that are left to grow will do so. They may have dips but in general good shares rise.
Of course such an approach doesn’t generate much interest on the stock market and someone came up with the idea of covered calls, a strategy which can generate some small extra income, but is also risky.
Well, some people like risk. Some people back apparent losers to win, and when they win come out with lots more money. So if you’re going to get involved with covered calls, make sure you have someone who knows what they’re doing helping you with it. There are even programs that can help, such as PowerOptions®. (It has that little copyright sign beside it because it’s copyright. Duh.)
PowerOptions® is said to be the only internet-based provider of data that gives investors the ability to make good decisions. It’s a bit like one of those books written by an old racing hand, the sort of person who really has been making money out of horses for decades. There’s no easy road to riches, but there are some helps along the way.