Tag Archives: stock investing

The Only Sure Thing in Stock Market Investing

sure thing stock market investing

Is taking money from the stock market a risk-free thing?

Is Stock Market Investing a Sure Thing?” You wouldn’t believe how many people ask me if investing in the stock market is a sure thing.

And in this little blog post, I’m finally going to address the matter of stock market investing as a sure thing once and for all.

Sound good?

Now to be sure:

I totally understand why people are looking for a stock market sure thing. It’s a classic struggle between fear and greed. You see, on one hand…

People want the reward of the stock market. They appreciate the stock market goes up. But they don’t want to take on the risk either. So instead they are left hoping for a sure thing in the stock market.

But can you have your cake and eat it too?

Why There’s Only One Sure Thing in the Stock Market:

The only sure thing in the stock market is that there are no sure things. I know this probably isn’t what you wanted to hear. But it’s the truth.

And here’s why you’d be wise to listen:

When you remember that there are no sure things in stock market investing, you are much less likely to get suckered into paying for a “sure thing.” And that’s a sure-fire way you can save money.

Seriously…

When you remind yourself that there are no “sure things”, you stop getting hyped up about the latest penny stock products, or shelling out for a hot new “trading system.” You won’t fool yourself into thinking you can find a stock-market-magic-bullet. Instead, you’ll see these tools as ways to round out and help you incrementally improve your stock trading.

Make sense?

Stop looking for tricks and tactics to beat the market and focus on improving yourself. When you look inwards to objectively analyze your stock picks and investment research methodology you embrace reality and make the uncertainty of no sure things work in your favour.

One More Nearly-Sure Thing in Stock Market Investing:

In case it’s not clear, anyone who is promising you a sure thing in the stock market is little more than a snake-oil salesman. The only sure thing are no sure things.

But:

Before we get too jaded and pessimistic there’s one more point I want to share with you, okay?

And that is…

While you can never know with 100% which stocks will go up, you can usually bet the stock market as a whole will go up. It’s not a sure thing. But over the course of history it has tended to be true. Just take a look for yourself…

long term chart for investing your money in the stock market

As you can see: Over the last 100 years, investing your money in the stock market has been a winning proposition.

As you can see from the chart above, even though there have been lumpy periods in stock market history, over the long term the stock market (as an index) has gone up. And hey…

If you’re still not convinced, just look at these long term charts of the S&P 500 and the Dow Jones Industrial Average.

So I don’t want to call this a sure thing. Because markets go up and down. But over the last 100 years the stock market has (for the most part) gone up. And the passive index-based investing strategies advocated in books like The MoneySense Guide to the Perfect Portfolio can help you take advantage while minimizing your risk.

But anyone who promises a anything more specific than the above is likely trying to convince you of a “sure thing” that simply isn’t, make sense?

And By The Way:  If you’re looking for more information to help you improve your ability to find winning stock picks I encourage you to download my free eBook below. There are no sure things, but it will tell you how I came up with a hybrid technical and fundamental approach that helps me consistently make profitable investing decisions. You’ll also get free tools and tips each week to help you become more knowledgeable about the stock market.

Trade Ideas For Stock Investing

Trade ideas for stock investing

See Why Trade Ideas for Stock Investing Can Be Very Straight Forward…

Trade Ideas for Stock Investing can help you regularly make money in the stock market. That’s because, without trading ideas your stock investing will stagnate. On the other hand, having an appreciation for trading your stock investments can help you compound your return and reduce volatility. Sounds pretty good, right?

But you might be wondering…

Are trade ideas for your stock investing really necessary? Can’t you just buy and hold your way to the bank? And isn’t short term trading expensive? Well, in this short blog post we’ll explore these questions and look at why having some trade ideas for your stock investing can pay off…

Trade Ideas for Core Stock Investments:

If you’ve been a long term buy-and-hold stock investor then you might not be interested in any trade ideas. You might even think that trading stocks is really expensive and erodes your returns. But when you learn to trade stocks online the commission costs of trading are so low that having trading ideas for your stock investing can really improve your returns, (even if you are only trading around a few core long-term positions).

And actually…

I have a long term outlook in all of my stock investing. I primarily buy stocks because of their fundamental valuation and growth outlook. And then it usually takes anywhere from 6 months to 3 years for my stock investing thesis to play out – so there is actually very little turnover in my portfolio… BUT… while my main thesis ideas might take a long time to play out, there is usually lots of volatility in the interim that I try to take advantage of by applying trade ideas to my long term stock investing.

Even though I’m a fundamental investor, I realize the value of technical analysis and I appreciate it can make sense to have trading ideas for your core stock investments.

So if you are also a fundamental investor who picks stock ideas based on your investment theses, then I encourage you to also open your mind to the possibility of short term trading ideas. You don’t need to go crazy day trading stocks every day, but if you accept that the market is inefficient in the short term then you can use stock trading techniques to improve your return and reduce your volatility. So how does that look in practice?

Trade Ideas for Value-Based Stock Investing:

Trade ideas for value-based stock investing might sound like an oxymoron at first. But I assure you this approach to trading stock ideas makes lots of sense. Now I’m assuming that if you’re a value investor then you are concerned with the intrinsic value of the business and how it relates to share price… So…

By creating a simple trading plan you can use very basic technical analysis to help you take profits and reduce or add to your stock position when the short term price action gets out of step with the intrinsic value. Often you will see stocks spike up in price by 5-10% in a single day without any news. In these cases I often take a little bit of profit, just to be safe. Then when the stock sells off to a support level without any news (or change to the intrinsic value of the company) I put the money back to work by re-buying the stock lower than where I bought it.

Keep in mind that I’m still long the stock and always maintain a “core position” since it’s unlikely I will time every uptick and downtick perfectly. But even if you are only semi-proficient at this kind of short term trading you can really pad your long-term returns and improve your capital gains. By the way, this is the basic system outlined in the book, The Best Trading System by Chris Beanie.

Swing Trade Ideas for Stock Investing:

If you’re a more active trader then you might consider learning more about swing trade ideas to improve your stock investing. While most swing traders use only technical analysis to make their stock trading decisions, I find you can use fundamental analysis with swing trading quite well. If you have a long list of fundamental stock ideas you like you can use swing trading techniques to really help you actively manage your investments. If you’re unfamiliar with swing trading but curious to learn more about how it can help you make more money from your stock ideas I encourage you to follow ChessnWine.

Just keep in mind…

To some extent your ability to find trade ideas for stock investing will come down to how much time you have to watch the market during the day and how much planning you can do each evening after the stock market closes. To be sure, it takes dedication and practice. But using trade ideas to improve your stock investing can be a very profitable approach to managing your own portfolio.

And By The Way: If you’re interested in learning more techniques to improve your returns and help you make more money in the stock market then sign up below for email-only analysis and investment ideas.