October 3, 2008
What is your best strategy to make money with stocks?
devhead asked:
I’ve been reading a lot of stock books lately, and I feel a bit overwhelmed with all the info and strategies. I’d like to hear from others what is their best advice and strategies on investing and making money in the Stock market.
I’ve been reading a lot of stock books lately, and I feel a bit overwhelmed with all the info and strategies. I’d like to hear from others what is their best advice and strategies on investing and making money in the Stock market.
For example, sell if it goes down 10%; sell stock in the first hour of the trading day; buy stock in the last hour of the day; use covered calls; buy puts; etc.
Thanks. Hopefully this info can be helpful to others as well.
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Comments on What is your best strategy to make money with stocks? »
You sound like you’re day trading or close to it - can’t help you there. For longer term, I like the high dividend payers (4.5%+) - it;s like free money, great tax rate, and the stocks may also go up, as well. If they don’t, they usually don’t go down too far, because the dividend keeps them stable. Check out T, BAC, C, KMP, WWE, GLS, DRYS, etc. There are certain industry types that tend to pay high dividends.
I also buy deep in the money calls on undervalued stock, using Lenny Dykstra’s strategy (more or less), and hold them for a few weeks to a few months.
There is no good evidence that any of the strategies you mention really work. There is a lot of nonsense written out there. Your best best is to buy and hold a diversified portfolio of stocks. Studies show that people who buy and hold do better than those who trade a lot. For most people buying no-load low-fee mutual funds is the best way to invest. Read some of these links:
You probably feel overwhelmed because a lot of the information you are reading is garbage. The truth of the matter is that investing in “individual” stocks is very difficult for the average guy or gal sitting at home.
Unless you have all day everyday to sit in front of your computer I think it is best to stick with “quality” mutual funds and index funds. You simply can not go wrong in the long term with a company like Vanguard. If you get into a quality fund early in life you will be set. Investing in funds is a much easier approach to investing than chasing “individual” stocks up and down everyday. It will drive a normal person insane after awhile.
I would check your state tax laws, as long term and short term sales could differ. They differ by state.
In my state, a long term sale is 1+YR,(5.3%) on the gain. A short term sale is less than 1YR(12%). When your buying and selling and thinking your making money, you have to take into account of the tax cost.
Research a good low cost, no load mutual fund that covers all you want.
I buy equal dollar amounts of the “Dogs of the Dow” on any given day (when I have the cash!) and then hold them for 13 months, and sell them.
This strategy returns between 17-20% a year.
Dont get overwhelmed. Dont sell if it goes down 10 % that is a stupid idea. I bought apple at 138 1 month later it was at 112. Did i sell? No because then i would lose my money. When it goes down buy more that is what i did. Now apple is up to 184 and i made a lot of money. I am up over 40% in a matter of months. Now i sell some and let the rest ride. That is how you make money. You invest in strong companies and when it goes down you buy more. Then if it goes down more you buy more. If it goes up a lot then you can sell some to keep atleast some of your gaines.
Buy some VMWARE (VMW)
It is going to keep going up for all of next year. If it goes down it is only momentarily and it will go back up.
if you buy blue chip companies for the long haul, min. 3-5 years out, you will do fine.
if you are buying today, with the idea of selling tomorrow, buy tech, and hope for the best.
Open a brokerage account at Zecco and I will help you for FREE. (I am a Portfolio Manager)
i have been reading a lot of stock books lately and i feel money is best .
sell if it goes down 10%; sell stock in the first hour of the trading day; buy stock in the last hour of the day; use covered calls; buy puts; etc.
If you are going to trade with any of these mentioned ideas. Just give me your money, and I will kick you in the nuts, it will save you months of frustration before you go broke.
Buy quality companies that you would hold onto no matter what happens in the markets (BAC, DRE, C, HPQ, GE, JNJ, PEP,G, BUD) it does not matter what happens in the financial market, if one percent of people loose their houses, chances are pretty good that people will buy potato chips, drink beer, and need soap to wash up with.
If you are going to gamble, go to Vegas, at least the rules of the table are clear.
Check out look for the annual reports, then read what Buffet has to say. They are easy to read, and based in sound reasoning, logic, and basic economic sense.
Learn from the best,
See my strategy here. 45% in 5 months.
Buy small cap stocks with superior technicals and fundamentals that break out of sound bases. NEVER average down, cut your losses at 10%, and let your winners run.