How Do You Make Money With Stocks
I think the question of how to make money with stocks is on the mind of every investor. Stories of the person who was able to retire at an early age because of being able to pick the correct stocks are always available. This is kind of like the stories of the gambler who strikes it rich. The problem is that with every success story there are multiple stories about people who lost money. These stories are just not advertised by those who are trying to get you to buy into their stock tips.
Investing publications will often post on their cover sheets that they have the answers on stocks that are undiscovered and have unlimited potential for the investor that jumps in right now. If you have ever bought into this scenario, and I have, then you find the stock generally goes down immediately after you buy it. I have often thought I should just short sell all stocks that come via the latest and greatest stock tip. Except that is also a very risky step to take.
If you are trying to make the proverbial easy buck with your stock investments, then you will always be chasing the next golden goose and end up quitting by saying that it can not be done. That is usually true. In any endeavor, those who are not willing to put in the work do not make the money. If it was easy to make money, then we would all be living in upscale neighborhoods. However, if you are willing to put in a little work and be patient, there is a possibility of you being able to make money with stock investments.
Your investment research should be to look for companies that have a sustainable competitive advantage. They should have products that will enable them to continue to gain market share within their industry. They should also have the mindset that everyone they encounter within their circle of influence is a needed component of their business. This includes customers, employees and shareholders. They should also be strong enough to be able to weather the ups and downs of any trends in the economy. It is easy to make money when everything is going well but how strong are you when the economy turns down. There are many companies that are no longer around who were not able to make the transition when things turned.
Good strong management is also a needed commodity to make a company successful and thus have their stock price continue to climb. Those executives who are able to see into the future for the next ten years and are willing to make the correct decisions even if they seem out of sorts at the current time are the executives who drive successful companies. You need to find companies with this type of management team and it will not matter the industry they are in, they will find a way to make it work. Of course that is another thing that is needed. Industries that analysts do not consider in favor will not do well in the short term. If you invest in these industries, you need to be willing to wait for a while for the prices to go up. I am not saying they will not eventually go up but it may be a while.
That brings me to my last tip. Invest for the long-term. The stock market has historically done better than many other investments but it does go up and down. Do not invest money you need to have available in the short-term. Diversification of your investments is always a good stock trading strategy. Make sure your investments are trading in the most efficient money making way possible by enhancing your return while reducing your risk.
