A good many investors wonder if predicting victorious stocks is certain. When a stock is seen to rise strongly one year, the reasonable thing is usually to take for granted that it will continue to do so the next time, isn’t it? If the inherent market rises well in one year, is it safe to assume it will continue to do the same? When you’re used to seeing patterns, how tempting it is to think so now, the way we’ve seen everything rally near the last several months. But one can’t just take your money to the market because they believe in inertia – that things have to as a matter of course move in the direction that they are heading in. What these theories would make for is a really sorry stock market strategy.
The Dow Jones Industrial Average, that’s been around for more than a century, does act in this intuitive way. About three-quarters of the time the Dow Jones has been in existence, it has reported a upward move in the country’s stocks. But it only rose two years, back to back about 60% of the time. The rest of the time, it dropped after a banner year. This compounds the need to stay financially informed if you have any money invested. Like Warren Buffet, the best stock market strategy is to buy and hold on to a quality company’s stock
The only stock market strategies that are safe then, involve buying a good company, and to continue holding onto it until all the rises and falls, average out. Most important is reading and staying abreast of economic news such as subscribing to the Investor’s Business Daily or Wall Street Journal.
Have you heard of the terms growth stocks and value stocks? These are somewhat important in finding a workable theory that you can back up against. Basically, companies that are priced very closely to the value of their company are considered to be growth stocks, and stocks that are very cheap considering the price of the company, are considered value stocks. Most the investment columnists will tell you that growth stocks if they can grow one year, are likely to do so again next year. The Investors Business Daily subscription is a great tool for stock market investors and it is dedicated to empowering individual investors by providing the data, investing tools, and investment training they need to become highly successful in the stock market.
Many well put-together markets like our own always determine their basic level based on a future performance expectation, not anything to do with the past. But there is a somewhat comforting predictability to one part of the stock market – the small cap stocks. These small companies are not all that expeditiously treated on the floor; traders advise people to hold on to their stocks, and not trade them on the slightest hint at the market. Reaction time takes awhile. It takes them a while to react to them. But, on the whole, once they begin to move, they stay moving.
If you’re searching for a good strategy, consider investing in top performing stocks ranked high by the Investor’s Business Daily for this year, think about purchasing up shares in small companies that performed well last year. However, with today’s ever changing financial complexion, you’ll likely decide on bigger cap stocks for the bigger part of your portfolio.. One has to make investment decisions based on weak vs. strong dollar future expectation, deflation, goldilocks economy or inflationary leanings.
Staying on top of trends that impact the future of business is the crystal ball of an investor. Be read up from the world’s largest stock market database that helps you discover successful companies before others find out. Monitor the bottom line financial data for companies and industrial groups as well as proportional rankings that give you a distinct marketplace vantage. Get an IBD subscription online and you get the print addition as well as the free add on online subscription.