Do you remember days, like some time ago, when Apple and Tesla’s actions soar every day? I mean when bonus actions have been announced.
Almost every day of the week of negotiation, the actions were in green and in two -digit percentage. Crazy, right? The most satisfactory and the best part was that you could enter the title at any price, come back later and make a few percent profits on the capital for which you have invested. But is it the right way to invest? What if the actions fall, even if it did not happen? In a word, always invest in the long term in quality actions, such as AAPPL, not for APE actions such as AMC, because you never know, when it falls. You just can’t find the reason why the fundamental principles are far away and the evaluation does not exist for the course of the action corresponds.
Anyway, continue …
It looks like today (at least in the past two weeks), all the market movers and the big cannons drag on the side. Whether Apple, Tesla, Microsoft or Amazon, choose everything (I mean the big stable guns). In fact, even the very popular square is up to the lower 200s. But believe me, this is part of the game.
Stocks move laterally, and when it seems forever, the gains are starting to flock. Just look at the APP in the past decade, this has always been the case. But, when the stock moves, it moves very quickly and difficult to take the momentum.
So, as an investor, what are you doing? How can you timer the input and exit point, or should you even? You have two options here, one is to keep money and wait for market management or two dollars’ costs (DCA) on your favorite stock choices. BTW, the second option is what I will prefer any day.
If you give me the choice to buy App or Microsoft every day of my life, I will do it. That it is even a fraction of actions. And even if the results are bad! I mean that the results can really be bad for the two companies above?
Let’s talk.
American inflation
Before I am, why am I talking about American inflation here? What has it to do with American shares or the stock market in general?
Recently, I read this on the National Daily.
American inflation is the highest in 13 years while prices increase by 5%
If you carefully read the article above, you will notice that the American economy has a lot of inflation. Costs increase extremely high while people always find their jobs.
Anyway, I am not an economist, there are people with many more capacities than me to take care of the part of inflation. Central banks will eventually jump to make sure that things are under control and control inflation, to prevent the 2008 financial crisis (recession).
Now let’s look at the part of Canadian inflation and see where we are.
Canada’s annual inflation rate reached 3.4%, the highest level in almost a decade
Again, look at these figures, certainly not as high as us, but still 3.4% and the highest inflation rate in almost a decade!
Not a good good sign.
Now look at this below.
What I mean here is usually that inflation rates (or percentages) are reaching registration levels, central banks jump quickly into money flow control by increasing interest rates. There are a ton of videos explaining this, so I won’t continue.
But, the only thing that interests me more is that inflation has to do with the United States or the Canadian stock market.
Before answering this question, look at this –
The sudden increase in inflation is generally considered to be the most painful, as companies must be able to transmit higher contribution costs to consumers.
Likewise, Consumers feel The unexpected “pinch” when goods and services cost more. However, companies and consumers eventually acclimatize to the new pricing environment. These consumers become less likely to have species because value over time decreases with inflation.
Thus, in a word, inflation is bad for stocks and stock markets as a whole. Aside.
And that brings us again to a series of questions, when do you do when the stock market is going nowhere or on the side for months or even years? Or even better when the stock market is declining? Does the average cost in dollars (DCA) invest in other debt instruments such as state bonds, buy gold or money, invest in cryptocurrencies or invest in real estate. What are you doing? How do you get your money to get the best value?
Although banking interest rates are extremely low, it is almost unnecessary to keep money in your checks, unless you want to save certain banking costs by maintaining the minimum balance of the account. What do you do with the rest?
Here is my simple solution to the above problem
What I really feel is that companies such as Apple and Microsoft will be extremely good, regardless of inflation or not (because their products are extremely good and people buy whatever happens). Especially Microsoft, I love their reports Q. The company is so well diversified with products, services, recurring income and the cloud.
You can banish on AAPPL and Microsoft for the next 20 years. I can guarantee it. The list also includes Amazon and Google. But I’m not a big fan of the last two. And forget Facebook for now, please. AMD is a much better choice to make.
To be honest, always stay simple, diversification helps, but not always necessary.
What I like personally at Apple and Microsoft are the stock graphics. Simple!
Do not invest once and don’t worry! You will then be bored if the market is swinging. Instead, periodically invest a piece. With Apple and Microsoft, you will also get regular dividends. It’s free money in your TFSA, you can withdraw or reinvest to buy more actions and keep long -term.
So here is what I would do, if I was you, keeping the things simple and neat again, simply keep the average cost in dollars in the actions of Apple and Microsoft, just these two every two weeks, monthly or quarterly with everything you can. Even $ 100 is good. You will eventually grow.
And stop worrying about the price swings daily. Remember that flat stocks are always good. When the move or the rally begins, you will have fun, and it will happen, may not be today, or this year, but it will be! Do not read a lot of daily news – like iPhone sales in China down, it’s useless. The iPhone cannot be replaced, as is the Windows or Microsoft Office subscriptions. He will not drop. Even if this is the case, he will eventually go up. Invest and appreciate, unless a new major from time to time.
Thank you for reading, let me know your thoughts and comments below.
