Fox Business Network anchor Liz Claman's top tips to DailyMail.com readers on how to crack the stock market - including the 'Rule of 110' and industry secrets money managers will be 'furious' with her for revealing
- Liz Claman has revealed her top tips for cracking into the stock market
- The financial guru shared insider secrets Wall Street doesn't want you to know
- Well-timed stock buys, choosing the right markets, and avoiding money managers are the keys to success
One of America's leading business anchors has shared her insider secrets to help regular workers break into the stock market and achieve financial freedom.
Liz Claman, the host of Fox Business' The Claman Countdown, told DailyMail.com that the stock market is not as exclusive as it seems, but hedge fund executives 'want you to be intimidated' by the industry.
The financial guru revealed that the keys to unlocking the stock market include timing stock buys efficiently, compounding your earnings over time - and simply leaving your stocks untouched until they reap huge rewards.
And after more than 20 years' experience guiding her viewers through the financial jungle, Liz insists there isn't a better time to start investing than right now.
![](https://i.dailymail.co.uk/1s/2023/03/02/17/68269877-11812841-image-a-15_1677779267658.jpg)
Claman has led the way in business reporting for over two decades, gaining insider knowledge not normally shared with the working public.
Many people seemingly believe the industry is out of their reach, with the bottom 50 percent of US adults holding just 0.6 percent of stocks on the market.
But Claman said an intimidation factor is one of the first hurdles for would-be investors, as many talk themselves out of stock purchases after being faced by Wall Street jargon.
Rule #1: Start now
Plenty of potential investors tell themselves they will 'someday' get into stocks, but in reality, they may avoid it out of a sense of caution.
The financial expert said there is never a perfect time to lay the foundations, noting 'the power of compounding' as the key to building a fortune.
For a 25-year-old hoping to retire at 60, opening up with $100 and adding $50 a week would save $299,000 by retirement - assuming an average account return of six percent.
But if that same investor waited until they were 35, this fund would sit at less than half of what it could have been, making about $147,000.
'Over a long time, the stock market returns more than any other investment, as the bumps smooth out over time', Claman added.
Rule #2: Don't pay someone to invest your money
While big money executives often depict themselves as gifted traders with intimate knowledge of the field, Claman revealed a stock-buying secret they don't want the public to know.
'Money managers will be furious at me for saying this, but if you stash your cash in an S&P 500 index fund, over time your returns will be better than paying someone to actively pick stocks for you,' she 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 with almost no effort.
By utilizing in an S&P 500 index fund, traders are able to blanket invest in the strongest companies on offer instead of making risky, specific one-time bets.
The benefits of this were brought into the spotlight by Wall Street legend Warren Buffett, who in 2008 laid down a challenge for the hedge fund industry to outdo the umbrella investment strategy.
One firm took on the challenge, pitting their 'active investing' tactic against Buffett's belief that 'passive' funding can beat top hedge funds in performance.
And while the firm's million-dollar bet gained $220,000 after it was placed in five hand-picked, personally managed funds for ten years, Buffet raked in $854,000 despite never touching his money.
'People who leave their money alone see the best returns,' Claman added.
![Liz Claman, the host of Fox Business' The Claman Countdown, has given her top tips for breaking into the stock market](https://i.dailymail.co.uk/1s/2023/03/07/13/68280649-11812841-image-a-1_1678194044269.jpg)
Liz Claman, the host of Fox Business' The Claman Countdown, has given her top tips for breaking into the stock market
![The financial guru said to look for times of turmoil, such as the 2008 financial crash or the Covid-19 lockdowns, to identify the best times to invest in a strong stock](https://i.dailymail.co.uk/1s/2023/03/07/16/68425545-11812841-image-a-1_1678208067453.jpg)
The financial guru said to look for times of turmoil, such as the 2008 financial crash or the Covid-19 lockdowns, to identify the best times to invest in a strong stock
Rule #3: Wait for the sales
Investing broadly and utilizing techniques like the S&P 500 index fund are 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 do you spot a golden opportunity?
Claman said the best investment windows come 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 prime examples of this is Starbucks, which saw its stock value tumble amid the 2008 financial crisis as workers stopped splashing on expensive lattes.
But while many people wouldn't venture their cash on a declining stock, Claman said following a few key monitors would show it was in fact the perfect time to buy - with Starbucks stock now over five times what it was even before the market crashed.
When evaluating a specific opportunity, investors should ask themselves: Does the company have a history of efficient business? Is it a market leader? Is it valuable enough to ride out the wave?
As markets are routinely upended by tumultuous events every now and then, having the ability to spot a window is vital.
'Nobody even knew the lockdowns were a possibility, so no one anticipated them,' added Claman.
'What separates the wheat from the chaff is recognizing an opportunity.'
Rule #4: Understand the 110 rule
The rule of 110 is a little-known hedging strategy that Claman says is one of your best bets for building a thriving stock portfolio.
As a rule of thumb, the percentage of your money that you put into stocks should be equal to 110, minus your age.
So for a young 25-year-old investor, they could funnel 85 percent of their funds into the stock market if they are interested in becoming a serious money maker.
But while such an investment makes sense for someone with plenty of time to spare, the 110 rule dictates that older investors don't need to take the risks of holding on through major market dips.
However, the market specialist added a caveat to the rule: 'Never buy just one stock.'
Instead, look into exchange traded funds (ETFs), which allow you to buy into an industry you like without taking unnecessary risks.
Whether it be semiconductor chips, tech startups or healthcare, hedging your investments with an ETF allows you to funnel cash into a basket of stocks in a certain field.
'Then, once you have it - leave it for the long term,' added the business anchor.
'Don't go for specific, singular stocks you like, so you won't get exposed if that one goes through a bad time.'
Rule #5: Don't run from the bear - hug it
The final rule is one intended to offer a glimmer of hope in tough 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 swamps even the best of stocks,' said Claman. 'Instead of running from the bear, feed it a snack.'
'Look at a historical long-term chart of the stock market and you will find that at the worst point of just about every bear market, that sell-off is actually the best time to have bought.'
When markets rebound, the investors who pitched in on lucrative companies 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 it launched an internal review of its accounts.
The report found that the clients who saw the best returns between 2003 and 2013 were either 'inactive' - those who hadn't touched their money at all - or dead.
'We want you alive and kicking and facing a well-funded retirement,' continued the financial expert.
'Periods of market uncertainty provide wealth-building opportunities for the patient, diligent, long-term investors. So be that patient and diligent investor'.
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