Lyssa Beyer

Greetings and salutations. I am considered by some of my peers a free-market capitalist. I have been investing in the markets successfully for about 20 years. This column will hopefully spur your interest and help you enter the world of investing. I will keep things very simple and set a format that’s easy to remember and apply. Consult a licensed professional before attempting to enter the markets and do not use this column as your sole source of counsel.

The majority of UW-Eau Claire graduates will have an opportunity to participate in investing through 401k, 403b, 529, IRAs or some other taxable or non-taxable plan. I was astounded to learn most individuals have no idea what these actually are, but feel they are participating because it is the correct decision. These plans could be thought of as a garage to park your investment vehicles.

I have a few simple rules that have helped my success that I would like you to use as well.

Rule #1 – Never invest for greed.
This may sound like a contradiction, but time after time this tops the main reason individuals and firms have been hurt. Consider past market crashes, dot.com bubble and the recent housing bubble. Nobody likes a pig.

Rule #2 – Do your homework!
In the terminology, we call this due diligence (DD). As a rule of thumb, consider at least one hour for each investment vehicle you are considering. Homework in school increases your skill and knowledge of the subject. This is similar in investments. The lack of DD would probably rank one or two in reasons why people get hurt. People will get hurt because they succumb to greed, but with proper DD, you would not have considered the investment in the first place.

Rule #3 – I will leave this as the last rule for now.
What type of investor are you? For simplicity, investors fall into two categories, investors and traders. These two dislike each other like the north and south. An investor will consider the value and rational price in an understandable business whose earnings are virtually certain to be materially higher in the future. A trader will consider this time frame to be in seconds, minutes, or just a few months.

Risk management also falls in this category. Find your risk tolerance early and stay within those limits. Remember risk versus reward. I have risked between $0 to more than $100,000.

I would also like to offer my e-mail address for anyone who would like to comment or ask questions. If topic and space permits, I will try to address them in the column. I will not give specific advice, promote a particular investment or endorse a firm. Please send questions and comments to [email protected].