Three Ways to Invest

There are many concepts and techniques for investing in the markets, but in a sense they come down to three basics concepts: conservative investments, aggressive investments or simply, safe investing.

Most folks will say that conservative investing means not taking any chances as you grow your portfolio very slowly over time.

At the same time, aggressive investing would seem to mean taking risks and possibly losing money while in the process of building the value of your investments.

Safe investing is most often confused as being strictly another way of saying conservative investing. This is a major mistake. In fact your key to successful investing should revolve around investing safely.

The keys to safe investing

 apply to all purposes for investing, including:

• Managing a retirement account

• Building wealth

• Growing an education account

The principles revolve around a few basic concepts that can be implemented by anyone and most easily if you are using investment software. The concepts and the features to look for in an investment software program include:

• Market Exit signal

• Analysis of a ticker symbol (stock, ETF or fund) in comparison to others and to the market as a whole

• Buy/Sell signals

• Charts for visual verification

• Back testing to find the best strategies

The value of a Market Exit signal may sound obvious but one based on facts versus headlines or gut feelings will tell you not just when to sell and move your money to safety in either a money market or bond fund (or bond ETF) but just as importantly the signal will also tell you when it is time to jump back in. Many people missed the signal for when to get back into the market when the recent recession was ending and missed substantial gains. Of course those who followed a Market Exit signal avoided major losses when the recession began.

Charts are great is showing you trends and can even be used to analyze a particular ticker symbol. But by performing analysis, especially a type of relative strength momentum such as alpha, you can not only know how a symbol may perform but how it compares to others and to the stock market itself.

Buy/Sell signals based on different criteria such as when a symbol starts to decline as compared to both itself and others can trigger a sell signal and a complimentary buy signal for another symbol that is moving up.

The ability to back test a group of funds or ETFs to find the best set of buy/sell rules and when to use a Market Exit signal will result in investment strategies that will lead you not just to safe investing but to safe and profitable investing.

Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he is a former registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana.