Article: Listen To The Markets And Understand What They Are Saying!

Discussion in 'Stock Market Forum' started by longtermbull, Jan 29, 2017.

  1. longtermbull

    longtermbull Administrator Staff Member

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    Each and every investor has their own strategy, their own long-term goal and their own idea of what makes a good investment. We can specialise in specific areas, look for short-term profits or invest for the longer term. The key to long-term success in the stock market is an ability to listen to the markets and understand what it is saying. So, where do you start?

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  2. kirtimeliwal

    kirtimeliwal Member

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    The stock market is a volatile market, Before purchasing any stocks a trader has to make sure that he has completed all the basic learnings, legal formalities and study about the company. An investor should build his own profit making techniques to make a better income through investment.
    In a volatile market, at first, a traders should analyse what actually situations are and what can be done to handle risk in these sudden movements.
     
  3. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I'm a big believer in dollar cost averaging, diversification, keeping a fair amount of cash on hand, and some degree of hedging.

    The good news is that the markets have an upside bias and tend to trend upward greatly over time. We can always be aware that we have occasional corrections, recessions, and the odd bear market and big recession here and there. But markets are mostly trending up over the years and decades. And with rates still relatively low and corp profits high, I think we'll be ok for a while.

    I've learned that I'm much better at picking individual stocks than trying to predict what the broad markets will do in the short to mid term. I just try to have myself positioned so that I don't get hurt too bad and hopefully make at least a little $ somewhere in my portfolios if something bad happens.
     
  4. longtermbull

    longtermbull Administrator Staff Member

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    I totally agree JR - putting all of your eggs in one basket is crazy. Hedging your bets and adding a safety net for your portfolio in times of trouble - gold, etc - makes perfect sense. What % level of cash do you normally hold within your portfolio?
     
  5. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Typically 15-25% in my more active taxable accounts... never less than 5%, rarely more than 25%. 30% or more cash in any one account is unusual.

    I don't use much leverage either - generally only as needed for positions other than long stock positions - and no more than 25% of account value in any one account.
     
  6. longtermbull

    longtermbull Administrator Staff Member

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    You seem to have all based covered there - I would therefore assume that you performance has generally being positive over the years. Short term trading taking advantage of volatile markets and gold offering you some support in times of trouble.
     
  7. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Yes, performance has been pretty good overall. I'm generally less active in my bigger holdings such as Google - those are more longer term buy and hold... although I usually end up selling some eventually.

    I have been guilty in the past of being too heavy into cash, too bearish, etc out of fear. In the more distant past I have also been guilty (like most investors) of being overly bullish at times. Hindsight is of course always 20/20.
     
  8. Chartman

    Chartman Member

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    As long as you live to fight another day you must be doing something right JR :)
     
  9. JR Ewing

    JR Ewing Super Moderator Staff Member

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    True. It's a long game. And for many of us, the long game has many short term battles we engage in.
     
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