Stock Market Profits

Stock Market Profits – An Achieveable Goal

Everyone invests for the same reason: stock market profits! But when investing in the stock market, profits are never a foregone conclusion.

In fact, every time one person profits in the market, someone else loses. The trick is to be on the winning side of the equation as often as possible, and to make sure your stock market profits are always larger than your stock market losses.

To that end, I recommend that you set some goals, then outline a plan of attach to reach your goals. As they say, it’s better to plan and fail than to fail to plan.

My recommendations to reach your goal of stock market profits:

1) Educate yourself.

2) Find a mentor.

3) Diversify your efforts.

Education is Key

Obviously the stock markets can be overwhelming if you’re new. Options. Puts. Stop loss orders. OTC. The Dow. NASDAQ. It’s a whole new language!

Google any new term and learn what it means. There’s no such thing as too much information. The only stupid question (OK, that’s enough cliches!) is the one you don’t ask. But really, it’s true.

Read books. I’m going to make some specific recommendations in subsequent posts, but if you’re in a hurry, head over to the library and check a couple of them out. More on this later.

Subscribe to investing forums. Look for a lot more detail on these, but the first place you have to visit is The Motley Fool. Run, don’t walk, and visit that site as soon as you’re done here.

Find a Mentor

This one should probably be last, because it’s not easy, and when you do find one, he or she might recommend entirely different education and diversification stratgies! That said, my point is simply that it pays to talk to people who know what they’re doing.

When I refer to a “mentor,” I don’t mean listen to E.F. Hutton or read up on Warren Buffet. I’m talking about a real live person — someone you know personally, and who knows you. Someone who, if you ask a question, you’ll get an answer.

Someone you can meet for lunch, or pick up the phone and talk to. Yeah, that kind of mentor.

Where do you find successful stock market investors? They don’t look any different, or hang out in different places. You find them by talking about your interests, and striking up a conversation when stock market investing comes up.

Diversify your Efforts

No, I don’t mean diversify your portfolio, which everyone recommends.

I’m talking about implementing a multi-pronged investment METHOD strategy. You decide what you’re most comfortable with, but here are a few ways that people invest in the markets:

1) Hands-off Investing

- Hire a money manager or financial advisor

- Invest in mutual funds

- Fund an IRA

2) Hands-on Investing

- Research a stock, call your broker, buy and sell shares

- Get an online day trading account, buy and sell with a few mouse clicks

3) Automated (or semi-automated) Investing

- Use a stock trading program for buying a selling

- Use a program for recommendations, buy and sell via online brokerage account

All such methods are valid, and different people will be more or less comfortable with one or more. I suggest trying each and every one until you find the few that will work for you.

Published on 09 Aug 2009 in stock market profits, by admin

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Investing During a Recession

New reports detailing the financial gloom we live in are released everyday. Whether it’s updated unemployment figures, companies going bankrupt or political developments like the bank bailout, we live — as the Chinese would say — in “interesting times.”

So is a recession a best of times to invest — or the worst of times? I believe it is still possible to make those all important stock market profits despite the turmoil that fills the news.

One of the main ways to make stock market profits during the recession is to identify short-term downward pressures on stocks and commodities that have a light at the end of the tunnel, i.e. long term growth potential. Profits can be made from the stock market therefore by identifying companies, industries and commodities that will survive the recession relatively unscathed.

Another sure way to use the recession to your advantage, in a slightly nuanced way from above, is to identify areas that are likely to benefit from the economic downturn. Commodities are a good bet here; supply pressures often ensure that he dampened demand is more than outweighed in most cases. Apart from an initial dip, this has largely been the case with oil and a few other main commodities.

Specialized computer software is a must in such a volatile market environment. Software that performs thousands of quantitative calculation about the economic environment every second ensures that each qualitative decision you make is well informed by numbers, ensuring that stock market profits are safeguarded against that bit more.

To be sure, opportunities exist for stock market profits in virtually any economy. But profiting from the stock market is about forward thinking. In a recession, it relies upon long term investing and accurately finding under priced equities that have real staying power.