How To Invest Lesson 2: Strategies For Stock Investing

In this WealthLift Presentation, you will learn:

• What is an investing style and why do I need one?

• How much should I invest in the stock market?

• Why should I invest in different sized companies?

• What sort of companies should I invest in?

For more, go to WealthLift.com at: http://bit.ly/PtcMRu

Transcript

1. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. In this WealthLift video lesson, you will learn: • What is an investing style and why do I need one? • How much should I invest in the stock market? • Why should I invest in different sized companies? • What sort of companies should I invest in? Lesson 2: Strategies For Stock Investing
2. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: What is an investing style? Over 2000 companies on the New York Stock Exchange and over 3000 on the NASDAQ. Investors choose an investing style that suits their own situation. To create your ideal stock portfolio, consider: • Your investment timeline • Your personal risk tolerance • The time that you want to spend managing your stock portfolio
3. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #1 How much should I invest? Rule ONE - Never invest what you can’t afford to lose • Always keep a portion of your savings as a nest egg in case of emergencies. One to two months worth of living expenses is a good amount. Rule TWO - Find the risk-reward balance • The longer your investment timeline, the more of your savings you can put in higher return, higher risk assets. The longer you have until retirement, the longer your investment timeline. Rule THREE - Do what feels right • Consider your own situation and invest accordingly.
4. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #2 What are Large, Medium and Small Caps? Large established companies, with greater than $10 billion in market capitalization, are known as large caps, or blue chips. Example Companies: Medium sized companies, with between $1 billion and $10 billion in market capitalization, are known as mid caps. Example Companies: Small companies, with less than $1 billion in market capitalization, are known as small caps. Example Companies:
5. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #2 Small Caps Large Caps • Core products, limited markets • Higher chance of bankruptcy • Innovative products • High potential for fast growth • Mature growth phase • Stable growth • Lower risk • Potential for high growth in innovative companies Blend of characteristics of Small Caps & Large Caps Mid Caps
6. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #2 • More Small & Mid Caps • Less Large Caps Young Investors, Longer Investment Timelines • More Large Caps • Less Small & Mid Caps Older Investors, Shorter Investment Timelines
7. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #3 What are 'Value', 'Growth' and 'Income' stocks? Value Investing • Look for stocks that are currently priced below their intrinsic value, or what they are really worth. • Look at:  Company Assets  Current Earnings  Products  Competitive Advantage • Value stocks have a low Price-To-Earnings Ratios (PE Ratio) • Value stocks can be Small, Mid or Large Caps
8. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #3 What are 'Value', 'Growth' and 'Income' stocks? Growth Investing • Look for earnings momentum, or future growth in profits, and the products of a company. • Growth stocks usually have high Price-To-Earnings Ratios • Growth stocks are usually Small and Mid Caps
9. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #3 What are 'Value', 'Growth' and 'Income' stocks? Income Investing • Look for companies with consistently high dividends. Dividends are distributions of company profits to stockholders. • Income stocks are usually Large Caps
10. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. Lesson 2: Choosing an investing style #3 Dividend Payment = Dividend Declared x No. of Shares You Own What are 'Value', 'Growth' and 'Income' stocks? Income Investing Dividend Payment = $1 Declared x 500 Stocks = $500 in Dividend payments
11. Depictions of persons. product names and images modeled in this video are trademarks of their respective owners who do not endorse and are not associated or affiliated with WealthLift Inc. ©2011 WealthLift Inc. All Rights Reserved. In the next WealthLift video lesson, you will learn: • What makes a company valuable? • What’s the difference between a great company and a great stock? • What are some other key indicators investors look at when valuing a specific stock? • How do you find the information you need about companies? Congratulations – Lesson 2 Completed