Stocks 101: A Beginner’s Guide to Investing

Stocks are one of the most popular investing tools in the world, yet there is so much uncertainty surrounding them. If you don't know the purpose of stocks, or the different types of stocks available, don't worry. You are not alone.

Luckily, the financial advisors at American Investment Planners, LLC are here to offer their professional insight. Here are some of the stock market basics every investor should know:

What are stocks?

Stocks are an equity investment that represent partial ownership of a corporation. If a company is divided into 1,000 shares, and you own one of them, you effectively own 1/1,000th of that company.

What types of stocks exist?

There are two main types of stock, common and preferred.

• Common stocks: owners are entitled to vote and may (or may not) receive dividends.
• Preferred stocks: owners usually do not have voting rights, but have priority over common stockholders when it comes to dividends and asset liquidation.

Why do investors buy stocks?

There are many reasons why an investor may purchase a stock, but three of the most popular are:

• Capital appreciation: occurs when the stock rises in price, increasing the net worth of the owner’s portfolio. When a stock increases in value, the investor may look to sell it for a profit, or continue to hold onto it in hopes of continued success.
• Dividends: some companies regularly distribute their earnings to stockholders in the form of dividend payments. The more shares you own, the more money you will receive.
• Company control: stockholders have the ability to vote on management issues at annual shareholder’s meetings. The more shares you own, the greater your influence.

Want to get started investing?

Investing in stocks involves risks, including loss of principal. Before you take a plunge into the stock market, it’s a good idea to sit down with a qualified financial advisor and develop a sound investment strategy. The professionals at American Investment Planners, LLC have decades of experience, and will work with you to craft a plan that meets your needs, goals, and budget. To schedule a meeting with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

6 Pieces of Investing Advice for Millennials

Millennials have it tough, financially speaking. The job market is unforgiving, student debt is at an all-time high, and the aftermath of the Great Recession is still fresh in their minds. Seeing their parents and grandparents suffer from the recent economic downturn has scared away many millennials from investing altogether – but it shouldn’t.

These six tried-and-true pieces of advice will take the fear out of investing and put you on the path to financial success later in life…

1. Start as early as possible.

The most common mistake young people make is waiting too long to start investing. You may think that you don’t yet earn enough money to make a significant impact, but you are wrong. The amount of capital you start with is not nearly as important as when you start. Because of factors such as compound interest, every year you push off investing can really hurt you in the long run.

2. Set up automatic deposits.

When it comes to investing, consistency is key. The easiest way to stay consistent with your portfolio is by scheduling automatic deposits into your savings, retirement, and investment accounts. Doing this will ensure your funds are safely secured before you have a chance to spend them on something else.

3. Maximize your match.

401(k) plans are company-sponsored retirement plans which are funded through pre-tax deductions from your paycheck. Many employers even offer a matching program, in which they will contribute on your behalf up to a certain percentage of your salary. Make sure you are contributing enough money to qualify for the maximum match amount; anything less is basically giving away free money.

4. Pay off your high-interest debts.

It’s impossible to save money when you are drowning in debt. That’s why your first priority should be paying off all of your outstanding balances. If you have multiple debt accounts, make the minimum payment on all of your bills, and put any extra money towards the debt with the highest interest rate. This strategy will allow you to pay off your debts as quickly and efficiently as possible.

5. Diversify your portfolio.

Don’t put all of your eggs in one basket. Diversification is a core investment strategy used to mitigate risk by spreading your money across multiple investments. If you experience a significant loss in one of your accounts, your entire portfolio will not suffer as a result.

6. Consult with a financial advisor at American Investment Planners, LLC.

Just because it’s called “personal finance”, it doesn’t mean you have to do it by yourself. Consulting with a professional advisor at American Investment Planners now can put you on the path to financial success later in life.

The financial advisors at American Investment Planners, LLC have decades of experience helping people of all ages plan for life’s biggest moments. Let us help you. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

7 Essential Traits of a Good Investor

From the wealthiest of billionaires to the man celebrating his first day of retirement, successful investors are all around us. While they may appear in many different shapes and sizes, almost all of them share these seven common traits:

1. Patient. Patience is the number one characteristic of a good investor. Investing is a marathon, not a sprint, and you need to have a long-term mindset if you want to be successful.

2. Focused. A good investor is focused on his practice, and takes it one step at a time, one investment at a time.

3. Well-Informed. There is a wealth of information available on the subject of investing; use it to your advantage. A good investor is constantly brushing up their knowledge by reading the latest industry news and insights.

4. Cautious. The average investor sees a trend, and jumps in head first. A good investor is not so easily sold. They look deeper into the trend, find out why it is succeeding in the current market, and if this success is likely to continue.

5. Methodical. Every good investor has a different strategy, but every good investor has a strategy. You will be much more successful using a methodical approach than simply investing in whatever looks good at the time.

6. Disciplined. Once you have found a method that works for you, stick to it. Don’t let a few failures force you to abandon your strategy, and don’t let a few successes go to your head.

7. Resourceful. Good investors rarely do it alone. They know what resources exist that can be beneficial to them, and they use them to their full advantage.

Let American Investment Planners, LLC be your resource. Our financial advisors are ready to sit down and discuss your financial goals. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

Why Does The Stock Market Fluctuate?

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

You don't have to be a seasoned investor to know that stocks go up and down - just listen to the news or walk through Times Square in New York City and view the board with all of the stock market updates. But despite the fact that this is normal and something all investors should expect, a common question surrounding the topic is why? Why is it that stocks continue to go up and down every day, each week, and so on and so forth?

Truth is, one of the main reasons that the stock market fluctuates is because of an idea that you're probably familiar with - supply and demand. Essentially, when there is more demand for a stock and more people want to buy it than sell it, the price will naturally go up. On the other hand, if more people are trying to sell a stock than buy it, the price would be expected to fall.

Now we know your next question - what makes people want to buy or sell a particular stock? Ultimately, investors look at a company and try to determine its worth before deciding if it's the right company to invest in - for example, they may consider if there has been positive news or negative news surrounding the company lately. In this case, one of the main things that investors consider is a company's earnings. Companies that go public must report their earnings once each quarter, which is how investors can get their information about whether or not a company is on a good path or a bad path.

Although these ideas are some of the top contributing factors to why the stock market fluctuates, keep in mind that no one can really say for sure why stocks change and at the frequency that they do.

If you're new to investing, we know that the cause behind stock market fluctuation can be confusing despite the amount of research you do on the subject. That said, we want to help clear up any questions you may have about the stock market, as well as work with you to figure out an investment strategy that will work in your favor!

To get started with an advisor here at American Investment Planners LLC, please give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com - we'd love to hear from you!

The Trouble With Timing The Market

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's important to keep up with trends in a number of situations, but where the market is concerned, this doesn't necessarily hold true. While yes, it's natural to try to repeat history or want to adjust your portfolio because you suspect that the market will be at a high during a certain month or two, the truth is that trying to time the market can actually be extremely detrimental to your long-term goals.

An article from CNBC is quoted as saying the following:

"Trying to time the peak in any market cycle is no easier than trying to time the trough. Markets can behave in seemingly irrational ways, and these moves can last for long periods of time."

Since no one can predict external circumstances that heavily impact the market, it would be pretty difficult to pin point an exact period of time when the market will be at a high or a low. 

So what can you do? A suggestion from the Huffington Post is to use a strategy called "time in the market." Put simply, this refers to spending more time in the market and not taking yourself out of it just because it experiences a low every now and then. Of course we all have our short-term goals, but when it comes to investing, a better approach is to focus on the long-term. The Huffington Post explains:

"You don't see a slow, steady and consistent increase or decrease in the market over a specific time frame. Anyone who invests knows the market is extremely volatile and prone to drastic movements. This makes it even harder to time the market because you're dealing with a roller coaster of an investment ride."

As such, your best bet is to spend as much time in the market as you can, since you may be more likely to see the return you were hoping for by sticking it out through the highs and lows rather than making drastic changes to your approach to try and hit the market at just the right time.

Here at American Investment Planners LLC, our team has an incredible understanding of the market and knows what you need to do in order to achieve financial success. So, let us help! To learn more about our financial planning services, visit www.americaninvestmentplanners.com or call (516) 932-5130 today.

Reasons Why You Should Start Investing In November

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's never too early or too late to start investing, but believe it or not there is a certain span of months throughout the year when getting started is ideal. When is that, you may ask? The answer is any time between November and April; according to U.S News and World Report Money. Even if you are actively investing and have an account such as a 401(k), now is a good time to start looking at where your money is currently allocated, as you may want to make some changes. Here's why:

Just like businesses, sports teams, even students in school, have their ups and downs, so does the stock market, and research has shown that the U.S stock market has "consistently produced outsized returns" from November to April when compared to May to October. Knowing this, it seems only obvious that now is the right time to start looking into your investment options. While you may not have imagined the stocks to be something seasonal, the truth is that they are! This is in part due to the fact that as the year comes to a close, some people find themselves with extra money that they've saved or year-end bonuses that they can comfortably pass on to the stock market. Additionally, it may have something to do with the fact that tax season occurs during this window, which may encourage more people to be funding accounts that could directly effect the stock market.

The moral of the story is that if you haven't invested yet this year, now is the time to start thinking about doing so! To read more about why this six month period is a game changer for investors, check out this article from U.S News and World Report.

Once you've made the decision to start investing, or if you already have but need some guidance on your current investments, don't hesitate to contact us at American Investment Planners LLC! Financial planning is our only business, and it is our goal to assist others with the development and implementation of their financial plans.

For more information about the services we offer, please visit our website or call (516) 932-5130 today.