[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.timemanagementplans.com\/how-to-save-time-while-investing-in-stocks\/#BlogPosting","mainEntityOfPage":"https:\/\/www.timemanagementplans.com\/how-to-save-time-while-investing-in-stocks\/","headline":"How to Save Time While Investing In Stocks","name":"How to Save Time While Investing In Stocks","description":"How to save time when investing in stocks The stock market presents great opportunity for all of us but as in all media of exchange there are winners and losers. \u00a0In order to maximize your gains it almost certainly necessary and at the very least prudent to exercise due diligence. \u00a0That means you must study...","datePublished":"2016-09-08","dateModified":"2025-06-04","author":{"@type":"Person","@id":"https:\/\/www.timemanagementplans.com\/author\/mark\/#Person","name":"Mark","url":"https:\/\/www.timemanagementplans.com\/author\/mark\/","identifier":2,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/131cfccbaaff5083caadb2ebb178119fe605ab5a0bdcf4a00e7f2ec170a49434?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/131cfccbaaff5083caadb2ebb178119fe605ab5a0bdcf4a00e7f2ec170a49434?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Reflective Dynamics, Inc.","logo":{"@type":"ImageObject","@id":"https:\/\/www.timemanagementplans.com\/wp-content\/uploads\/time-management-plans-blog-logo.jpg","url":"https:\/\/www.timemanagementplans.com\/wp-content\/uploads\/time-management-plans-blog-logo.jpg","width":600,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/i0.wp.com\/www.timemanagementplans.com\/wp-content\/uploads\/save-time-while-investing-in-stocks.jpg?fit=720%2C360&ssl=1","url":"https:\/\/i0.wp.com\/www.timemanagementplans.com\/wp-content\/uploads\/save-time-while-investing-in-stocks.jpg?fit=720%2C360&ssl=1","height":360,"width":720},"url":"https:\/\/www.timemanagementplans.com\/how-to-save-time-while-investing-in-stocks\/","about":["General"],"wordCount":1210,"articleBody":"How to save time when investing in stocksThe stock market presents great opportunity for all of us but as in all media of exchange there are winners and losers. \u00a0In order to maximize your gains it almost certainly necessary and at the very least prudent to exercise due diligence. \u00a0That means you must study the markets and choose companies that are poised to grow their resources, their sales, and their profits. \u00a0The best investments are six months to 12 months out so that their returns are not immediately obvious.The casual investor simply cannot study the thousands of publicly traded companies and their industries. \u00a0The best you can hope to do is to make shrewd choices about where you get your information from, and on the basis of that make good, conservative choices about where you place your money. \u00a0Of course, the markets gravitate toward efficiency and there are several efficient channels that are designed to save you time. \u00a0Let’s take a look at how these channels work and what their pros and cons may be.Mutual Funds Do the Market Research for YouA mutual fund pools the money provided by many investors and uses that cash to buy shares in companies that fit a certain profile. \u00a0These may be manufacturing companies or travel companies or publishing companies. \u00a0The profile could emphasize companies that are growing rapidly or it could favor companies that are mature and relatively stable.The fund manager’s responsibility is to find opportunities to invest in stocks that match the fund’s target profile at the best possible time. \u00a0When the stocks increase in value and\/or pay dividends the mutual fund’s shares increase in value. \u00a0The fund may also distribute some of those realized dividends as dividends to its own shareholders.A mutual fund is for all intents and purposes a limited corporation that acts as a holding company in which it owns interests in other companies. \u00a0It is rare for a mutual fund to invest in other mutual funds. \u00a0This would be considered a form of derivative investing.By choosing a mutual fund as an investment vehicle you are offloading the burden of doing market research to the fund manager. \u00a0However, even when a mutual fund has been making a profit over the past 3-5 years you should not expect phenomenal results. \u00a0All mutual fund (and stock) prospectuses have to include some variation on the standard disclaimer: “Past performance does not guarantee future results.”When choosing a mutual fund you should look for simple targets and moderate to high success in the past three years. \u00a0But you should also compare the economy that produced those results with the projected behavior of the economy for the next six to twelve months. \u00a0If economic changes are on the way, the mutual fund may do better or it may do worse than in recent years. \u00a0Don’t waste time agonizing over the decision. \u00a0Look for mutual funds that perform well in economic times that resemble the near future.Dividend Reinvestment Plans Buy Future Shares for YouAnother to save time with your investments is to pick stable, well-established companies that have proven they can weather all storms. \u00a0Then simply sign up for their dividend reinvestment plans (DRIPs). \u00a0You may an automatic contribution every month, sometimes as little as $25, and the company takes whatever dividends it owes you and uses them to buy even more of the stock. \u00a0Over time your investment in the company builds up.DRIPs are popular among conservative investors who don’t want to spend a lot of time doing research and who don’t want to get involved with mutual funds, which can be very volatile when economic conditions change. \u00a0When you invest in a DRIP your shares are yours to sell whenever you wish. \u00a0You can leave them alone and allow them to build up in value. \u00a0Investing in 10-20 DRIPs is considered a safe, time-saving method of buying stocks.As with all types of investing DRIPs should be monitored. \u00a0You may need to change how you fund your investments, especially after you retire. \u00a0Not every DRIP works the same way. \u00a0This article explains some of the things you should watch out.Index Funds Remove Most of the Expenses and WorriesIndex funds are mutual funds that run on auto-pilot. \u00a0They are often referred to as Exchange-Traded Funds or ETFs. \u00a0The reason why they don’t require a fund manager to do research is that they follow a specific market reporting portfolio such as the Standard & Poor 500 Index or the Dow Jones Industrial Index. \u00a0These reporting indexes use special criteria to select the companies they track. \u00a0The index managers are not handling investments. \u00a0They just compute benchmark statistics based on the aggregate performance of the companies they list.Index funds are created by the major investment brokerages. \u00a0The index funds are required to buy and sell shares in the companies listed by the indexes in order to maintain a certain percentage breakdown of value. \u00a0This breakdown varies based on the index performance and how the fund’s investments are working. \u00a0The index fund may sell shares of stock to balance its investment portfolio or it may sell them to raise cash.Index funds are considered to be very safe because, like mutual funds, they spread the risk of investing across many companies but, like DRIPs, they don’t have high commission expenses and don’t involve any market analysis. \u00a0Everything is handled automatically.An index fund can lose value just as a regular stock or mutual fund does. \u00a0If the Standard & Poor 500 index loses value then all the brokerage index funds that follow the index also lose value. \u00a0However, index funds perform very well over time and they recover their losses quickly.The downside to investing in index funds is that many investors have learned about them. \u00a0In fact, after Warren Buffett told his shareholders that his advice to his wife upon his death would be to invest 90% of her money in index funds, about 30% of market capitalization gradually moved into the index funds. \u00a0This shift gave brokerages with large index funds a significant voice on the boards of the companies that their funds invest in.Everyone wants to be like Warren Buffett but his advice may be its own undoing some day. \u00a0If too many people invest in index funds, or rather if they invest too much money in index funds, the brokerages will be a better position to call the shots than the mutual fund managers who study these industries and the companies that make them. \u00a0The lack of expertise in a given market can lead to bad decision-making.Worse, the index fund craze may leave some companies exposed to so-called “activist investors” who seek out companies for the sake of forcing layoffs and breakups, thus hurting long-term shareholder value for the sake of making quick profits.It would be wise to balance your time-saving investments in a portfolio of different strategies, rather than to gamble everything on one specific method. \u00a0Saving time is important, but so is protecting your investments.Did you like this article?  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