Building Your Portfolio

Why should you own stocks? The answer is simple - because you can make money with them. As the following chart of the popular Dow Jones Industrial Average (DJIA) shows, the United States stock market is in a long-term upside. When you buy stocks for the long term, you are betting that the United States economy will continue to thrive.

Since 1929 stocks have averaged around a 6% average annualized gain. Of course, some years are better than others and the stock market does go down as we have seen with the March 2000 to March 2003 decline. But, if you buy and hold shares of the best-managed companies at reasonable prices, history demonstrates that you'll make money. And if you reinvestment dividends paid to you, you'll make more money. In fact, stocks are the best performing long-term investment as compared to bonds and cash. Even with all its risks and ups and downs the stock market is the place to be for the long run.

What Type of Investor are You?

Each person has their own investing style. Some people don't want to spend much time learning about stocks and the stock market. Others want to become stock gurus. Some people are terrified of losing money and find stocks unpredictable and scary. Others love the thrill of making money quickly and can tolerate losing money. Before you start investing, you should to decide what style is best for you.

On buyupside.com we describe two types of investors:

The Cautious Investor wants to own conservative long-term investments and does not want to take undo chances.

The Aggressive Investor is willing to own speculative stocks with the potential for large gains and is willing to take chances.

Decide which category fits you and then click on the appropriate one to learn how to build your portfolio.