As a stock investor, you should keep on learning new stock investing strategies. What worked in the past may not work now. What works now may not work tomorrow. So, as an investor, you need to keep on learning new things. Buy and hold was one of the most favorite stock investing strategies of the past. Does it work anymore? Most analysts are of the opinion that the days of buy and hold stock investing are over. Markets are much more volatile now. Electronic trading has infact changed the very nature of today’s markets. Here are five stock trading strategies that you can use over and over again;
Stock Investing Strategy #1:
Always look for those companies that are being ignored by most of the analyst. Most of the stocks that are hyped by the analyst on CNBC, Bloomberg, Wall Street Journal and other financial media always get overpriced pretty soon when most of the investors rush to invest in them. There is no use in investing in these over hyped stocks that are always overpriced and may soon crash. There are companies that go out of favor with the market for multiple reasons. But the underlying fundamentals driving the business of those companies are still strong. If you do your research, you can easily dig out such companies. The trick lies in investing in stocks that are undervalued.
Stock Investing Strategy #2:
Good Stock Picking is only the first step in your ultimate goal of building a market beating stock portfolio. Once, you have identified, your favorite stocks that you think are worth investing, don’t simply rush to invest in them. Observe the behavior of the stock on the charts for a few days. Use the charts to time your entry into the market. If you want to go long on a stock, enter the market close to the area of support. Similarly, if you want to go short on a stock, enter the market near an area of resistance.
Stock Investing Strategy #3:
Don’t simply enter and exit using Market Orders. Using a market order means getting the current market price. When you use the market order, your order might get filled at a price higher or lower than you had in mind when you placed the order. This is due to the fast nature of the stock market where stock prices are always moving up or down. Use Limit Orders and get the price that you had wanted for your stock.
Stock Investing Strategy #4:
Financial markets are highly interlinked in today’s global economy. Any disturbance in any other financial market may soon ripple over to the stock market. Keep an eye on other markets that can affect the prices of stocks in your stock portfolio. Currency markets are very important to watch if you have included foreign or international stocks in your stock portfolio.
Stock Investing Strategy #5:
Follow the trail of hot money. Go where you will get the best possible return on your investment. If it is the gold market, go there. If it is the oil market, invest there. If it is the currency market, trade currencies. This is what hedge funds are doing to maximize their returns. Include commodities and currencies as well in your portfolio. This is what you should also learn. This is also called Market Timing. Learn the art of Market Timing!
These five stock investing strategies will help you build a market beating investment portfolio. We have many more Investing Help Articles Now Available.