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how to get rich off the stock market ?
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| how to get rich off the stock market |
so, how to get rich off the stock market ? Is is really as hard as people out there say it is? There are many things to talk about, when up to 90% of all retail investors fail, when it comes to getting rich off the stock market. So obviously its not a game for everyone!
I keep reading blog posts around the internet that start off like this. “Why this Market Will Never Go Down Again”, and you can see that since the very first week of 2016, this market has been getting hammered. Normally when you start reading these sorts of posts, its a warning sign to get out. While we think the bull market might still have legs, you have to realise, Bull markets do not last a lifetime, and the stock market, even if you go back 200 years, never goes up in a straight line. You will always get DIPS, BLIPS, sideways and lots of volatility in between. There does come a point where the market has had HUGE OVERBOUGHT values, and a little wash out is needed to bring things back to fair value. Basically that is what you are seeing right now. And we do not believe this washing out is over yet!!!
1. You Need To Think independently
Traders, it is essential that you think for yourself. There are so many bulls on Wall Street it’s hard to count. According to Wall Street “groupthink,” when the market is down, you buy stocks because the market is on sale. When the market is up, you buy stocks because you might miss out. In other words, you are always in the stock market, and that may be risky. IF you cannot think for yourself, you are basically and inevitably doomed as a trader. If you can consistently rely on your thoughts, and your research and it makes you money consistently, we call that a "Reliant Trader" who instead of relies on others, can sit down in the chair do some reading, look at some charts and by the end of the week make some good profits.
2. You actually can Play both sides of the market
To be honest, in 2014 some turned bearish on the market, and it cost them a shitload of money. Instead of following the market trend, many people moved to cash and missed out on many good trading opportunities. They were everywhere. As one hedge fund trader in the movie,”The Big Short,” said, “I may have been early, but I’m not wrong.” One of his investors replied, “It’s the same thing.”
Since then, lots of investors have learned valuable lessons: Although it’s appropriate to have a bullish or bearish view of the market, you must be open-minded enough to play both sides. Sometimes your view of the market is wrong, or perhaps you are early. If you don’t admit or recognize your mistake, you will lose money. Unfortunately, most people won’t admit they are wrong, a costly error.
Think of the market is like a series of hills, like uphills, and downhills, rather than as only a bull or bear market. If you can free yourself from being permanently bearish or bullish, you can take advantage of short-term trends. This year, volatility has gone through the roof, so the current environment can be highly profitable for short-term traders, but, you probably have to be tied to your screen a bit more than the average trader, as the market in a matter of an hour, can snap completely the other way fast.
If you’re a longer-term investor, it’s more challenging. It appears as if the big bad bear is stalking the stock market and is ready to attack. And yet, if you are willing to play both sides, you can make money. To succeed, you need to have good timing skills.
The biggest mistake you can make right now is to put your head in the sand and refuse to believe that a bear market is looming. Just as the gloomy folks at popular blogs and forums missed out on years of stock market gains, if you don’t take action before a bear market arrives, you could lose much of your profits.
3. Here is What to do ?
Do your own research. Do not blindly follow the advice of a financial entertainer on TV, money managers who routinely predict 20% returns, or Chicken Littles who scare you into holding cash forever. Otherwise, you might as well take investment advice from George Constanza. (The “Seinfeld” character may have a “can’t lose” stock tip or two.)
During the last confirmed bear market in 2007, TV pundits and some financial advisors told investors that “conservative” stocks including Morgan Stanley, Lehman Brothers, and Bear Stearns “were great buying opportunities.” Then these so-called conservative stocks got obliterated. And here we are, nine years later, and investors are told to sit tight during an ominous bear market because “stocks always come back.” Many are going to get fooled again.
4. Follow the market, not the opinion of others.
The number 1 solution is to ALWAYS, ALWAYS, ALWAYS follow the market trend. Only the market is right and it always has the final word. When the market trend is up, you are long. When the trend is down, you are short (or in cash). Right now, the market seems to be pivoting from a bull to a bear market, which is why there is so much volatility and confusion. But there is no reason to panic, and pull all your money out of the market. Basically sometimes its much easier to make money in a BEAR market, because things fall faster, and not many people realise that. If you are unaware, brokers love a falling market better than a bull market, as profits come to them, and they do not have to spend more long at the screen. In fact if you ask any professional trader, they will secretly tell you that they like it when the market falls, because things hammer down fast, and it happens 3 times as fast. But realistically the stock market is designed to go up, over time, not DOWN. If you have a look over the last 200 years what the stock market has done, its actually gone UP over TIME, not DOWN like many people try to tell you.
If possible, keep an open mind, remain unbiased and unemotional about market direction, and monitor your portfolio (even if someone else is managing it). If you’re nervous, come out of your basement once in a while and smell the flowers. Even during vicious bear markets, the world doesn’t come to an end. In fact, there’s always an opportunity somewhere to make money. It does not matter if the stock market is going up or down. Realise that you can make money when the market goes up, but if the market goes down really hard, just realise you can start shorting assets and because of the velocity of the dropping, it can actually be easier to make money on a stock when its losing value because it usually FALLS much faster than it goes up. Not many people realize you can do this, even in 2008 people went broke, because they held onto positions, when in fact, they could have bet against the market [put on short positions] and QUADRUPLED their money.
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