The annualized return of the S&P500 over the last 10 years is 4.7%
My annualized return over the last 10 years is 12.3%
Okay, if you’ve read the introductory article you might be wondering how I could afford to essentially take two years off my day job to pursue a writing career. Here’s the short answer: I saved up a lot of money and invested it. All of it.
I made an average 12.3% annual return for ten years.
Want to know how I do it? Read on.
How I Invest
First, a disclaimer and warning.
Investing money always carries risks. I’m going to tell you how I’ve been investing my money. You can use this information to invest alongside me if you want—to make money with me, or lose it with me—or you can shake your head and ignore it. Don’t invest any money that you can’t afford to lose.
In other words, don’t blame me if you lose money.
Believe me, I have lost half of my money not once, but twice. Each time, I had faith and kept my money in the market. Both times, I made the lost money back and then some.
I play the long game. I’m not trying to get rich quick. My only goal is to beat the market, which is surprisingly difficult to do. If you want to play the stock market safer, then don’t follow my advice. Follow Warren Buffett’s advice: “put it all in a low-cost index fund that tracks the S&P 500 and get back to work.”
1. Set up an account at an online brokerage
I use Scottrade (which was recently acquired by Ameritrade). I have also heard good things about E-Trade.
2. Decide how much to invest
Remember, only invest what you can afford to lose. Take the total amount of investment money and divide it by 60. For example, if I want to invest $120,000, I divide that number by 60 and come up with $2,000. That $2,000 is how much money worth of stock that I’ll buy every week.
3. Buy a stock every week
Every Friday, I crunch the numbers using the various techniques I’ve learned (based mainly on Magic Formula and RSI, you can look it up) and come up with the best stock pick of the week. I’ll buy that stock.
After 60 weeks you run out of money. At that point, choose a stock you’ve had for over a year and sell it. Use the money from selling the stock to buy the new stock of the week. Rinse, and repeat.
Best Buys Now
I am constantly doing research on improving my investment methods. Based on my most recent data, here are the top five stocks you can buy today.
Next to each company name is the ticker symbol in parentheses and the price I paid for the stock.
Gilead Sciences (GILD) $80.80
A biopharmaceutical company that develops HIV/AIDS and liver disease drugs.
Five Prime Therapeutics (FPRX) $44.73
A biotechnology company that develops protein therapeutics to improve the lives of patients with serious diseases. Protein therapeutics are lab-created proteins that are used to develop drugs. Insulin is an example of a protein therapeutic drug.
Michael Kors (KORS) $46.16
Michael Kors is an American luxury fashion company established in 1981 by designer Michael Kors. The company is known for watches, handbags and other accessories.
The Buckle (BKE) $21.71
The Buckle is a chain of clothing stores operating in shopping centers across the United States. They emphasize personalized attention to customers and provide free alterations at their stores.
American Outdoor Brands (AOBC) $21.12
Smith & Wesson Holding Corporation recently changed their name to American Outdoor Brands Corporation, but it’s still the same company. They make guns and ammunition.