Fox Business Network anchor Liz Claman’s top tips to DailyMail.com readers on stock market investing

One of America’s top business presenters has shared her inside secrets to help regular workers break into the stock market and achieve financial freedom.

Liz Claman, host of Fox Business’s The Claman Countdown, told DailyMail.com the stock market isn’t as exclusive as it seems, but hedge fund executives “want to be intimidated by the industry.”

The financial guru revealed that the keys to unlocking the stock market include timing stock purchases efficiently, growing your profits over time, and simply leaving your shares untouched until they reap big rewards.

And after more than 20 years of experience guiding her viewers through the financial jungle, Liz insists there’s no better time to start investing than now.

Claman has led the way in business reporting for more than two decades, gaining inside knowledge not typically shared with the working public.

Apparently, many people believe the industry is out of reach, with the bottom 50 percent of American adults owning just 0.6 percent of the shares in the market.

But Claman said an intimidation factor is one of the first hurdles for would-be investors, with many refusing to buy shares after being confronted with Wall Street jargon.

Rule #1: Start now

Many potential investors tell themselves that ‘someday’ they will get into stocks, but in reality, they may avoid it out of caution.

The financial expert said there is never a perfect time to lay the foundation, highlighting “the power of compounding” as the key to building a fortune.

For a 25-year-old expecting to retire at 60, opening with $100 and adding $50 a week would save $299,000 at retirement, assuming an average account return of six percent.

But if that same investor were to wait until he was 35, this fund would rank at less than half of what it could have been, earning about $147,000.

“For a long time, the stock market has outperformed any other investment, as the bumps smooth out over time,” Claman added.

Rule #2: Don’t pay anyone to invest your money

While deep-pocketed executives often portray themselves as gifted traders with intimate knowledge of the field, Claman revealed a stock-buying secret they don’t want the public to know.

“Fund managers will be furious with me for saying this, but if you keep your cash in an S&P 500 index fund, over time your earnings will be better than paying someone to pick stocks for you,” he said.

Noting that “the industry is very good at convincing people that they need them,” Claman insisted that regular people are missing out on making money almost effortlessly.

By using an S&P 500 index fund, traders can invest in the strongest companies on offer rather than making risky, one-time specific bets.

The benefits of this were highlighted by Wall Street legend Warren Buffett, who in 2008 issued a challenge for the hedge fund industry to outperform mainstream investment strategy.

One company rose to the challenge, pitting its “active investing” tactic against Buffett’s belief that “passive” funding can outperform the best hedge funds.

And while the firm’s million-dollar bet won $220,000 after it was placed in five carefully selected and personally managed funds over ten years, Buffett raised $854,000 despite never touching his money.

“People who leave their money alone see the best returns,” Claman added.

Rule #3: Wait for sales

Investing widely and using techniques like the S&P 500 index fund is the best way to go for most investors.

But if a certain stock really catches your eye, the financial guru said timing is everything.

The big question is: How to detect a golden opportunity?

Claman said the best investment windows arise in times of uncertainty, such as the Covid-19 lockdowns, where “there is always a silver lining and sometimes a golden one.”

One of the best examples of this is Starbucks, which saw its share value plummet in the midst of the 2008 financial crisis when workers stopped spending on expensive lattes.

But while many people wouldn’t risk their cash on a declining stock, Claman said tracking a few key indicators would show that it was, in fact, the perfect time to buy, with Starbucks stock now five times what it was even before. that the market crashed.

When evaluating a specific opportunity, investors should ask: Does the company have a track record of doing business well? Are you a market leader? Is it valuable enough to ride the wave?

As markets are routinely disrupted by tumultuous events from time to time, having the ability to spot a window is vital.

“Nobody knew that lockdowns were a possibility, so nobody anticipated them,” Claman added.

‘What separates the wheat from the chaff is recognizing an opportunity.’

Rule #4: Understand rule 110

The Rule of 110 is a little-known hedging strategy that Claman says is one of his best bets for building a healthy stock portfolio.

As a general rule of thumb, the percentage of your money that you invest in stocks should equal 110, minus your age.

So for a 25-year-old investor, you could funnel 85 percent of your funds into the stock market if you’re interested in becoming a serious money maker.

But while such an investment makes sense for someone with a lot of time to spare, the 110 rule dictates that older investors don’t need to risk holding on during big market crashes.

However, the market specialist added a caveat to the rule: “Never buy a single stock.”

Instead, look for exchange-traded funds (ETFs), which allow you to buy in an industry you like without taking unnecessary risk.

Whether it’s semiconductor chips, tech startups, or healthcare, hedging your investments with an ETF allows you to funnel cash into a basket of stocks in a given field.

“Then once you have it, put it down for the long haul,” added the business host.

“Don’t look for specific, singular stocks that you like, so you don’t get exposed if that one hits a hard time.”

Rule #5: Don’t run from the bear, hug it

The final rule is meant to offer a glimmer of hope in troubled times, as a bear market — a situation where stock prices plummet and investors sell — can be a great way to hit the jackpot.

“A climate of fear often overwhelms even the best stocks,” Claman said. ‘Instead of running away from the bear, feed him a snack.’

“Look at a long-term historical chart of the stock market and you’ll find that at the worst of almost all bear markets, that selloff is actually the best time to buy.”

When markets recover, investors who helped in profitable ventures stuck in a rut are the ones who come out on top.

In fact, financial planning giant Fidelity proved that holding stocks is the soundest investment strategy of all, after launching an internal review of its accounts.

The report found that the clients who made the best returns between 2003 and 2013 were “inactive” — those who hadn’t touched their money at all — or were dead.

“We want you alive and kicking and facing a well-funded retirement,” the financial expert continued.

‘Periods of market uncertainty provide wealth-building opportunities for patient, diligent and long-term investors. So be that patient and diligent investor.’