Passive Investing In The Stock Market
Passively investin in the stock market can definately work pretty well if your goal is to make money in the long term. It does work, especially if you invest into great companies.
After enough time the SPY which tracks the overall market has had a average stock market return around 10%. This means that on average the stock market goes up 10% a year, it may go up or down 30% or one year, but on when everything has been combined in the past 10% was the average.
So, if you went out and bought a bounch of stable companies, then odds are it would have paid off 10 or 20 years into the future. Of course there is no way of knowing exactly what will happen in the future, but the past is a pretty good indicatior and it only has good things to say about buying and holding.
You could also increase your returns by trying to find the best possible investments out there. By simply pick companies that are stronger then your average company you can recieve profits that are higher then your average profit as well.
Undervalued stocks with things such as good PE Ratios, low Debt and good balance sheets tend to outperform others over a long time period.
You could also help increase your return by looking for dividend paying stocks. If the stock pays out a decent dividend it can help you to get an income now and help you pull out more money from your investment in general.
In addition to that you can even increase your returns when passively investing by selling covered calls. A lot of people do not think of selling covered calls as a passive way to invest for the long term, but it definitely can be.
I sell covered calls today and it takes me about 5 minute every month or two to keep it going and it is well worth it because it is extremely powerful, despite the added risk of being called out early.
All and all passive investing is a great way to make money from your account without having to consistantly manage your trading account.
