Cheat Sheet For Long Term Investing (Or How To Maximize Your Savings)


For those looking to invest in financial products for the long-term, or those who want to maximize the returns on their savings, but don’t know where to start, I have compiled a straightforward set of tips of what to buy, when to buy and when to sell to help achieve those goals. 

Safest Stocks to Buy 
 
The safest stocks to buy are blue chip stocks. They appreciate in value over time and pay dividends. 
 
Blue chip stocks are shares of very large and well recognized companies with a  long history of sound financial performance.
     
Dividends are a sum of money paid regularly  by a company to its shareholders out of its profits (or reserves).  These are typically distributed annually. 

Examples *
 
The 10 biggest blue chip stocks 
Stock Market Cap 10-Year Total Return 
Microsoft (NASDAQ:MSFT) 
$1.06 trillion 690% 
Amazon.com (NASDAQ:AMZN) 
$985 billion 2,490% 
Apple (NASDAQ:AAPL) 
$928 billion 1,070% 
Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) 
$794 billion 453% 
Facebook (NASDAQ:FB) 
$574 billion 423%* 
Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) 
$523 billion 288% 
Visa (NYSE:V) 
$395 billion 1,200% 
Johnson & Johnson (NYSE:JNJ) 
$372 billion 233% 
JPMorgan Chase (NYSE:JPM) 
$370 billion 348% 
ExxonMobil (NYSE:XOM) 
$328 billion 62% 

* DATA SOURCE: S&P GLOBAL MARKET INTELLIGENCE. *RETURN SINCE 2012 IPO. 
 
When to buy stocks 
 
Buy stocks during recessions, downturns, or crises because it is during these times that share prices are low. 
 
News will say when a country or the global economy is in such situations. News will also say if share prices have dropped at the same time.

Example 

   
Where to park money while waiting for a recession, downturn, or crisis 
 
If the economy is still recovering from a recession, downturn, or crisis, put your money in a local currency time deposit (TD) or fixed deposit (FD), or commodities I.e. oil/oil exchange traded fund (ETF). Local currencies and commodities appreciate in value as the economy recovers. Interest rates also increase as the economy recovers. 

If the economy is booming, put your money into USD TD/FD, YEN TD/FD,  gold/gold exchange traded fund (ETF), and government bonds. These financial instruments appreciate in value during a recession, downturn, crisis, which will give you more money to invest in blue chip stocks. 
 
Time deposit (TD) is a deposit of money that pays higher interest than a savings account but imposes conditions on the amount, frequency, and/or period of withdrawals. This is also called fixed deposit (FD). 
   
Exchange-Traded Fund (ETF) is an investment fund traded on stock exchanges, bearing stock-like features. 

A government bond is a debt obligation issued by a national government to support government spending. It generally includes a commitment to pay periodic interest, called coupon payments, and to repay the face value on the maturity date.

Example 

 
When to sell stocks 
 
Sell stocks during an economic boom. At this point, share prices are at a high. 
 
News will say when everything is going well with the local or global economy. 

As for what to do with the proceeds of the sale, you have the option to put it in a USD TD/FD, YEN TD/FD, gold/gold ETF, or government bonds in preparation for the economy to decline and the opportunity to buy stocks again.
 
Example 

   
Where to put money while waiting for the economy to boom 
 
While waiting for the economy to boom, put your money in a local currency TD/FD, or commodities I.e. oil/oil ETF. As mentioned before, local currencies, or commodities appreciate in value as the economy recovers. Interest rates also increase as the economy recovers. 

Once the economy booms, you have the option to convert the local currency TD/FD, or commodity into a USD TD/FD, YEN TD/FD, gold/gold ETF, or government bonds in preparation for the economy to decline and the opportunity to buy stocks again.

How to predict share prices 
 
You don't.  
 
No one can predict exactly what the highest and lowest price of a share will be. One can only make an educated guess based on the business cycle. 

About me 
 
I am a semi-retired IT professional and a self-taught retail investor.  The tips in this blog were distilled from decades of study and tested through actual participation in financial markets. 
 
My investments make up a significant portion of my nest egg which has enabled me and my wife to go into semi-retirement.



 
 

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