All Time Wealth

Your Internet Location for Finding, Increasing and Enjoying Wealth

Investing in Stocks

Vladimir's LST System

There have been a lot of  books  written on how to be a smart investor and how to time the market. In fact, many people make a living on developing a “system” to time the market and then sell that system to other people. While there are a lot of indicators that can tell you when to  invest  and when to get out, one excellent way to  invest  is to be a “contrarian investor.”

A contrarian investor means that you are doing the opposite of what other people are doing. It takes a certain amount of finesse and “chutzpah” to be a contrarian investor but it can help you make money, and it can keep you from losing money.

Contrarian  investing  means that you need to buy when other people are selling and sell when other people are buying. For example, during the tech boom in 2000, the person who made money was the person who sold their tech  stocks  when everyone else was feverishly buying. Likewise, the person who bought Asian  stocks  during the Asian flu is seeing — and will see — an appreciation in that investment because they’ve bought what other people are selling.

People buy and sell every day, so how do you know what to buy and what to sell? The answer to this question is to go and look at the cover of  investing  and  stock  market magazines at your local magazine store. On the cover, you will see the popular industries that people are snapping up like crazy or dumping as quickly as possible. If you own the popular ones, get out. If you don’t own the unpopular ones, get in. The popular ones may go up some more, but it will go down because that’s what  stocks  do: they go up and they go down.

By selling when others are buying you are taking profits easily. By buying when others are selling you are snapping up opportunities at a discount. The concept seems crazy, but it works. Why? Because of the herd mentality. Many investors are undereducated when it comes to  investing  so they simply follow the crowd. Willingly, they buy and buy  stocks  that go up in price and are shocked when it comes crashing down because they followed the herd and didn’t realize that  stocks  fluctuate.

Is contrarian  investing  foolproof? No. And no  investing  philosophy is foolproof. Contrarian  investing  is not meant to replace quality research and carefully considered transactions. What contrarian  investing  is meant to do is to help you take profits when they’re available and buy cheap  stocks  when they’re available. It’s true that some  stocks  plummet for a reason but if you combine contrarian  investing  with some research, you’ll be able to buy  stocks  when they are unpopular and ride them back to the top!

Vladimir's LST System

Source by Jeff Lakie

Categories

Tags

creating an online business data leak financial adviser forex investment forex investment plan forex investment secrets forex investment strategies forex money manager fx investing computer software increase wealth starting a home side business invest in foreign currency invest in forex tax free invest in forex trading join forex trading now pitfalls of starting an online business run an online business safe haven forex investing start an online business today starting an online business work at home business