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Stock Investment  » It’s Stocks, Not Markets, that Bring Investment Success

It’s Stocks, Not Markets, that Bring Investment Success

It’s Stocks, Not Markets, that Bring Investment Success

by Gabriel Nijmeh

If you are fairly new to investing and looking for some guidance

or if you are seasoned investor, let me introduce you to NAIC.

National Association of Investors Corporation (NAIC) is a non-

profit, tax exempt organization whose membership consists of

investment clubs and individual investors. Founded in 1951, the

mission of NAIC is to provide investment education, information

and support. They prescribe to four basic, yet timeless

investment principles:

1. Invest regularly, regardless of the present outlook for the

economy or stock market.

2. Reinvest all earnings, letting the power of compounding work

for you.

3. Discover growing companies so that your wealth can grow as

their sales and earnings grow over the years.

4. Diversify your holdings, and don't put all your eggs in one

basket, regardless of how carefully you watch that basket.

The late George A. Nicholson, Jr. CFA - father of the modern-day

investment club movement, gave these principles to a good friend

in 1939 and told him that if he followed them he would make the

money he needed to start his own business.

"I never thought these principles would be so aggressive,"

Nicholson once told Better Investing editors. "They were meant to

be defensive, to protect investors from losing money. They turned

out to be quite offensive, too." He enjoyed comparing this

approach to investing with his college football experiences. "The

best offense is a strong defense."

I can attest from own experience of such a disciplined investment

program. For the most part, I have invested exclusively in

mutual funds because I never had the time or experience to

properly research and analyze individual stocks. One day as I

was reading through the business section of my local newspaper, I

came across an organization called the Canadian Shareowner

Association (CSA) which piqued my interest. I started researching it a

little more and as a result of my research stumbled on NAIC's

web-site, which then lead me to learn about Warren Buffet and his

style of disciplined investing. The Canadian Shareowner

Association follows a lot of the investment principles of the

American based NAIC.

Membership to CSA is inexpensive and the educational materials

are very informative and drive home the above noted investment

principles. For only $79 a year, I decided to join the CSA which

includes a bimonthly magazine with two company stock studies,

market outlook, financial planning and more. In addition, I have

access to the low cost investing program where I have set-up my

investment plan. The great thing about such a program is that

you can buy shares in any dollar amount from such companies as

Johnson and Johnson, Microsoft, Pfizer, Wal-Mart. Your money is

pooled with other investors and trades are executed during

specified trading windows. For example, if you invested $50 in

a stock that is trading at $30, you will own 1.67 shares.

Another great feature is that dividends are automatically

reinvested allowing for compounded growth.

Whether you join an investment club or are a self-directed

investor, you work at your own pace. Learning how to analyze

companies using the stock selection guide which is a tool that

was created over fifty years ago and is organized in five

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sections. The section guidelines will help you determine if the

company would be a good investment by:

1. Evaluating historical sales and profit growth and estimate

future growth

2. Analyzing historical management performance

3. Analyzing historical profit and price data

4. Evaluating risk and reward and;

5. Determining the potential return on an investment.

The software is easy to use and you can download company profiles

with historical information thus saving you data entry effort. As

company financials are released quarterly and yearly, you just

enter the information and keep an eye on performance.

For more information, you can check our

http://www.better-investing.com or http://www.shareowner.com to

find out more information.

Finally, if you want to be a successful investor keep in mind the

following:

1) A focus on the long term.

2) A discipline to apply in building and managing a portfolio.

3) Patience to persevere.

Bear or bull markets, a sound, disciplined investment strategy

will bring you investment success over the long-term.

About the Author

Gabriel is the editor and webmaster of The Money Advisor -

http://www.the-money-advisor.com. He believes that everyone is

capable of controlling their financial destiny with the right

combination of rich thinking and smart action. The Money

Advisor, a knowledge network of people, articles, tips, e-books

and ideas about making money, saving money and building wealth!