January 7, 2016 at 12:13 pm #380AnonymousPennies: 0
To achieve truly high returns at stock investing, an investor should start their search for hot stocks with Industry Sectors. No matter how bad a company’s financials may be, no matter how overvalued a stock is, if a company does business in a hot Industry Sector, the stock will usually move up with the industry.
Just recently we saw the price of gold and oil rising. Naturally, all the companies involved in those areas shot up. Many stocks were going up 300% or more within months. These are the stocks you want to be in.
January 7, 2016 at 6:13 pm #401AnonymousPennies: 1
Sector charts are great to use but many don’t know what to do with them. Takes a bit of homework but the best place to start is to see who the top performers were within that sector.
January 22, 2017 at 4:52 pm #1038AnonymousPennies: 0
Pick the Right Sectors
If the market is moving higher, we can begin to look at different sectors to find which ones will provide us the greatest potential for profits. Certain sectors perform better than others, so if the market is heading higher, we want to buy stocks within sectors that are performing the best. In other words, we want to invest in sectors that are outperforming the overall market.
Pick the Right Stocks
We could simply buy a basket of stocks reflecting the entire sector, and this could do reasonably well, but we can do better by just picking the best stocks within that sector. Just because a sector is moving higher does not mean that all stocks in that sector will be great performers, but a few will outperform; those are the ones we want in our portfolio.
One process for finding individual stocks is the same as the process for sector analysis. Within each sector, we want to find the stocks that are showing the greatest price appreciation. Once again, we can look at multiple timeframes to make sure the stock is moving well over time. The stocks that have performed the best over two or three timeframes are the stocks we will buy for our portfolio.
It is important to note that there are some other factors to consider when buying a stock. Additional criteria to look at before you buy includes:
• Liquidity: Buying stocks with little volume makes it hard to sell at a fair price if quick liquidation is required. Unless you are a seasoned investor/trader, invest in stocks that trade over a couple hundred thousand shares a day.
• Price: Many investors shy away from high-priced stocks and gravitate towards low-priced stocks. Trade in stocks that are above $5, or preferably higher. This is not to say there are not “good” cheap stocks, or not “bad” expensive ones, but do not shy away from a stock just because it is a high price, or buy a stock just because it is cheap in dollar terms.
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