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Mr. Auwerda
September 2, 2019
Investing Theories
Investing is a very common thing that many people stick to and enjoy doing. It
can only benefit someone if they know the right things to do to make the money they are
expecting. Warren Buffet, Jim Cramer, Dave Ramsey, and Suze Orman all have the
investing game down better than almost everyone else. Looking at their tactics and
All of these investors have a few things in common. All investors want to get out
that it’s better to start young with investing. Cramer mentions that it is better to take
risks when one is young, rather than older because it if a business crashes and takes
the money with it, one has their whole life to recover from it. Orman agrees with this
statement because she mentioned that one of her tips is to “start early and start right”.
She also states that time is one of the most important keys. Another similarity that the
four investors has is the fact that one has to start saving for retirement early. Ramsey
suggest to invest in a 15% of the income received into a tax-favored retirement account.
Although all of these investors have managed to be very successful in the same
element, there are some contrasting theories that each person believes in. Cramer
mentions to take a risk if one is young. It is better to take the risk and lose it all, then to
not take the risk wondering if it could’ve made a difference. Ramsey states that one
should get out of debt. It takes some people a while to get out of debt because the
money that has to be paid varies from person to person. Some people are not young
anymore when they get out of debt just because the price was so high. I believe that
Ramsey is right to get out of debt first only because if the market does crash, that’s
more money lost that could have been put toward debt. Cramer’s theory does not
pertain to everyone given that those in debt should make the right choice and figure that
When coming up with my own investing theories, I really took into consideration
all of the articles I read and the packet about Investing 101. One principle is actually the
balance aggressive and conservative investments. It will not help much when so much
money is only put into one business, and that business fails. Balance is key. Make sure
you have small investments just as much as big. The second point I want to hit on is
using solid data and fundamentals. It isn’t safe to try and guess what the market will
most likely do because most likely, you will be wrong. The market is never certain and
always has bumps that are unexpected. You need reliable data before believing
anything. Always remember to invest in things that you like. If you can’t put your heart
into an investment, what’s the point. In theory, if you really enjoy and like a product,
there is a good chance that others will, too. The fourth point I have is that if it sounds too
good to be true, it probably is. Professional investors always have more information, so
if they are reacting to something, there’s probably something you don’t know and aren’t
being told. Always make sure you’re in the loop for everything happening. The last point
I have is to always put some money to work for yourself. Remember to save
consistently, but also put your own money to work. Saving money under your mattress
is a bad strategy. It’s alright to be conservative, but always have something coming in.
There are many different views on investing strategies, and it is always good to
be informed with as much information as possible. With that, you’ll know all you need to,
and it is good to have options with how you spend your money while investing. It is
recommended that you work with a financial advisor for the best option for you
personally. Doing your research can certainly pay off in the end.