What is the best stock market strategy for you?
Submitted by Van Beek on November 11, 2009 - 15:21
The first question to ask yourself is if the terrain of the stock market is actually a terrain that you want to enter. Do you know this terrain well enough to understand its pitfalls and do you recognize the natural advantages that this hilly terrain can offer?
Are you the general who has a sound stock market strategy and who is allocating its assets towards the winning direction? Or have you been more an explorer who has been searching and attempting many roads, consuming your assets to see if you can find one road that leads to El Dorado?
Explorers sometimes struck gold, if they are lucky. But most don’t. When I invest my savings, my assets, I do not want to be dependent on being lucky. I want to be like the general with a strategy who knows where to go and how to get there.
So, what is the best stock market strategy? This depends. I know what it is for me. But every person will have to decide what the best strategy is for them. Let’s have a look at what factors play a role in making this decision.
Three factors to consider when choosing a stock market strategy
In your choice for the stock market strategy that fits you best, the following three factors are to be considered:
- Your understanding of the terrain of the stock market
- Your resources like knowledge and time
- Your enemies to rational decisions: fear and greed
The first question to ask yourself is if the terrain of the stock market is actually a terrain that you want to enter. Do you know this terrain well enough to understand its pitfalls and do you recognize the natural advantages that this hilly terrain can offer?The second question to ask yourself is how you want to enter this terrain. This has to do with the level of risk you can and want to accept and the resources you have. Do you want to put everything down to one move or do you want to spread your resources over multiple approaches? Do you have the time and relevant professional knowledge to plan and manage very detailed and complex operations, or do you want to keep your approach simple, straightforward and easy to control.
Fear and greed
Thirdly, you ask yourself how much influence emotions like fear and greed have on you when the pressure is mounting and how you avoid to fall victim to them.
Stock Trend Investing is the stock market strategy that is best for me. The trends in the market are like the hills in a terrain. They offer the natural opportunity to make solid gains. Mutual funds and ETF’s offer the possibility to spread resources without having to spend too much time on getting detailed knowledge of individual companies. And the buy indications and sell warnings from the Stock Trend Investing system provide a framework to keep a check on fear and greed while still giving room for individual judgment.
What is the best stock market strategy for you and why is that? Please share your comments with us.
Buying stocks is not
Buying stocks is not difficult, but you'll be needing a few days lead time if you haven't done it before! If you did not have the money to get started and you wanted to get started quickly, you needed to borrow money, or even buy stocks on credit. This is better known as “buying on the margin." The convenience and ease of the Internet has leveled the playing field, allowing just about anyone to be able to invest in the market with less money than ever before. However, in order to avoid losing your shirt, you need to have a basic knowledge of investing before attempting to invest online.
Not borrowing
Please note that at Stock Trend Investing we do not recommend to borrow money, not off line and not online to buy stocks or funds. Our recommende approach for you is to invest your savings in a smart way that does not take a lot of your time.
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