3 Investing Fads and the One Strategy That Beats Them All

4 Minute Read

Was it really just a few years ago that gold was all the rage in the investing world? Who can forget the financial experts who repeatedly declared gold the only truly safe investment? If you wanted a secure future—and who doesn’t—you had to invest in gold or suffer the consequences.

At the time it made sense. Gold prices were roaring, jumping $700 an ounce to a high of $1,900 in about a year. But then, after bouncing around for another year, gold prices lost all those gains and are now hovering back around $1,200.

It’s hard to believe gold was simply an investing fad that has come and gone, leaving many investors worse off than before. And it’s far from the only one. See if you recall any of these other short-lived investing strategies.

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Day-Trading Disasters

Remember day trading? In its heyday in the late 1990s, you could make thousands of dollars buying stocks or other types of investments and selling by the end of the day. People quit their jobs to become day traders!

It was an idea that made sense at the time. What’s now known as the Dot-com bubble created an extreme bull market, and anyone with an online trading account could make huge profits day in and day out.

Then the bubble burst, and traders began losing money as fast or faster than they’d made it. New rules were put in place requiring “pattern day traders” to have a specific amount of money in their accounts. Plus, decreased market volatility made large daily profits impossible. Today, competition from large institutions keeps most individuals from attempting to day trade. However, you can still find plenty of companies willing to teach you how to do it—for a price.

The truth is, when it comes to retirement investing, nothing replaces the time-tested investing strategy of building wealth over time.

Can’t-Lose Stock Strategies

Honestly, you can find a new “can’t lose” investing strategy for every day of the week. You’ve seen the articles: “3 High-Yield Stocks to Dump Today!” “So-and-So Discovers 3 Stocks With Serious Potential in the Next 12 Months,” “10 Top-Rated, Must-Own Mutual Funds for 2017,” “4 Blue-Chip, High-Dividend Franchise Picks to Buy Now!”

These bits of daily investing advice have replaced day trading for a lot of investors. They read all the random recommendations they can find and piece together a strategy they think will give them an edge in the market. That sounds exhausting, doesn’t it? And while it may pay off every once in a while, is it worth all the effort?

Stick With the Tried and True

There will always be some new investing fad promising fast and easy returns. And while some people will make money on these schemes, the vast majority of us don’t have the time, skill or guts to avoid losing our shirts—much less build any actual wealth with these tactics.

The truth is, when it comes to retirement investing, nothing replaces the Dave's investing strategy of building wealth over time:

  • Begin investing as early as you can. Compound interest takes time to work its magic.
  • Diversify your investments by selecting good growth stock mutual funds that allow you to use the power of the stock market without taking on the risks of single-stock investing.
  • Invest regularly—in your 401(k) with each paycheck, for example. And don’t change your investing habits when the markets take a dive. Maintaining that discipline means you’ll buy more mutual funds when prices are low and fewer when prices spike.
  • Review and rebalance your investments every year with an experienced investing pro. Selling off some shares of your top performing funds in one category to buy more fund shares in a slower growing one may seem like a bad idea. But by keeping your mutual funds evenly distributed between categories, you complete the buy low, sell high equation.

Your retirement is too important to risk on a passing investing trend. For a truly secure future, you need a solid retirement plan and a great batch of mutual funds to power it. Your investing professional can help you build your plan—set your retirement goal, decide how much money to invest each month, and choose where to invest it. Work with an honest financial advisor to help you see your plan through with regular checkups that ensure you stay on track to reach the goals you’ve set.

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