I've been thinking about starting a stock market prediction business. Clearly
Ryan Bertrand Jersey , there is a huge market for timely and accurate information of this type, and just as clearly, predicting the future is much
easier than dealing with the realities of whatever is actually happening at the
moment. If investors could know what's going to happen next, they could develop
a plan to deal with it in the present. Maybe Wall Street could help me get this
new business up and running! What's that? Wall Street institutions already spend
billions predicting future price movements of the stock market, individual
issues & indices, commodities, and hemlines. Really? Is that right also?
Economists have been analyzing and charting world economies for decades, showing
clearly the repetitive cyclical changes and their upward bias. Funny then, or
strange would be more accurate
Nathaniel Clyne Jersey , that the advice generated by the oracles of Wall Street seems to assume that the current environment, good or bad, will be
everlasting. Isn't it this kind of thinking and advising that prolongs the
downturns and "bubbles" the advances---in all markets? If it were true that our
favorite pinstriped product pushers can actually predict the future, why would
investors do what they do in response to the predictions? Why would financial
professionals of every shape and size holler: "sell" at lower prices, and "buy
at any price" when market valuations surge upward? Shouldn't lower prices be the
call to the mall? Most Wall Street soothsaying has a short-term focus that
dwells upon today's market conditions; most Wall Street glossies emphasize the
long-term nature of investment programs, and encourage investors to apply
patience to the program they decide to use for goal achievement. Why is the
advice so out of sinc? The reason for the emphasis confusion is simple: it's
easier to play to the emotion of the moment than it is to look beyond--- even
though we all know that a directional change will be along eventually.
Regardless of the direction, Wall Street advice will always fuel the operative
emotion: greed or fear! Wall Street's retail representatives never go against
the grain of the consensus opinion--- particularly the one projected to them by
their superiors. You cannot obtain independent thinking from a Wall Street
salesperson; it doesn't fill up the "Beemer". Here's some global advice that you
will not hear on the street of dreams: Sell into rallies. Buy on bad news. Buy
slowly; sell quickly. Always sell too soon. Always buy too soon. And by the way,
who do you think is buying and selling the securities you have been told to dump
or to hoard? No self respecting guru would ever refute the basic truths that the
market indices, individual issue prices
Joe Hart Jersey , the economy, and interest rates will continue to move in both directions, unpredictably, forever. Hmmm, this is where you need to focus
your attention if you want to get through the investment process with your
sanity. You need to expect and plan for directional changes and learn to use
them to your advantage. Tranquilizers may be necessary to get you through the
first few cycles, but if you have minimized your risk properly, you can actually
thrive on the long-term predictability of the markets. The risk of loss cannot
be eliminated. A simple change in a security's market value is not a loss of
principal just as certainly as a change in the market value of your home is not
evidence of termite damage. Markets are complicated; emotions about one's assets
are even more so. Cyclical changes in all markets are just as predictable
conceptually as knowing approximately where you are within a cycle is knowable
actually. The key is to understand what your securities are expected to do
within the cyclical framework. Now there's a knowledge business with no Wall
Street practitioners! Predicting individual stock prices is a totally different
ball game that requires a more powerful crystal ball and an array of semi legal
and illegal relationships that are unavailable to most investors. There are just
too many variables. Prediction is impossible, but probability assessment has
enormous potential. Investing in individual issues has to be done differently,
with rules
Wayne Rooney Jersey , guidelines, and judgment. It has to be done unemotionally and rationally, monitored regularly, and analyzed with performance evaluation
tools that are portfolio specific. This is not nearly as difficult as it sounds,
and if you are a shopper, looking for bargains elsewhere in your life, you
should have no trouble understanding the workings of the stock market. There are
only three decision-making scenarios that investors need to master if they want
to predict long-term success for their portfolios. The "Buy" decision has two
important steps: Step one allocates the available investment assets, by purpose,
between Equity and Income securities
Jamie Vardy Jersey , based on the goals of the investment program. It is done best using The Working Capital Model. Step two establishes strict selection
quality measures and diversifies properly within each security class. Investment
Grade Value Stocks are the low-risk equity champions; long-term, non-gimmick,
managed CEFs produce the best incomediversification mix available in readily
tradeable form. The "Sell" decision involves setting reasonable targets for
profit taking for all securities in the portfolio. Loss taking decisions must
not be undertaken out of fear, and must be avoided during severe market
downturns. Understanding the forces causing market value shrinkage is important
and a highly disciplined hand at the emotion control button is essential. There
is no such thing as a good loss of capital. The "Hold" decision is most common,
and it regulates and moderates the process, keeping it less than frantic.
Continue to hold onto fundamentally strong equities and
