Finding Good Investments in the Stock Market
Finding good investments in the stock market is easy in a bull market when stock prices are rising.
Not so in the middle of a bear market...
until, that is, the stock market has really been crushed as in early 2009.
Then it's time to look for investment opportunities.
Here's a guide to making your search for good investments easier.
When looking for good investments in the stock market concentrate on industries rather than on individual stocks.
Stocks in the same industry tend to move together as a group, but every industry has its winners and its losers.
Be wary of any stock that under performs its peer group.
Look at it this way.
A company in any industry can go broke; but a major industry tends to recover sooner or later.
In a bear market investors tend to sell stocks indiscriminately, throwing out the baby with the bath water.
When a bull market takes hold the cream tends to rise to the top.
Why stress over stock selection when you can find investment opportunities the easy way? Consider stocks in the commercial real estate business in early 2009, like equity real estate investment trusts (REITS).
These companies (REITS) invest in office buildings, shopping malls, apartment complexes and so on.
Up until 2007, they and their shareholders had been on a roll for years.
Investors benefited from rising stock prices and nice dividends.
Then commercial real estate got hit hard and real estate investors had a couple of real bad years.
Now, in this scenario ask yourself this question.
In your search for good investments, would you rather bet on some real estate company you know little about ...
or would you rather bet that the real estate industry in general will recover? The more specific you get in looking for investment opportunities, the more risk you take in the stock market.
Would you rather try to pick the best REIT, or would you settle on just owning a small part of a large portfolio of real estate stocks? If you chose the latter, here's how to take advantage of investment opportunities in real estate or any major industry.
Some of the major mutual fund companies offer specialty funds that specialize in industries or sectors like real estate.
You simply invest in the fund and they look for the good investments, make the stock picks, and manage the portfolio.
You don't need to play the stock market to make money in stocks.
You just need to be invested in the right economic sector or industry at the right time.
In other words, your list of potential investment opportunities has just been shortened to a dozen or so industries groups vs.
5000 or so individual stocks.
Finding good investments in the stock market isn't as difficult as it may seem ...
if you simplify things and don't get too specific.
Not so in the middle of a bear market...
until, that is, the stock market has really been crushed as in early 2009.
Then it's time to look for investment opportunities.
Here's a guide to making your search for good investments easier.
When looking for good investments in the stock market concentrate on industries rather than on individual stocks.
Stocks in the same industry tend to move together as a group, but every industry has its winners and its losers.
Be wary of any stock that under performs its peer group.
Look at it this way.
A company in any industry can go broke; but a major industry tends to recover sooner or later.
In a bear market investors tend to sell stocks indiscriminately, throwing out the baby with the bath water.
When a bull market takes hold the cream tends to rise to the top.
Why stress over stock selection when you can find investment opportunities the easy way? Consider stocks in the commercial real estate business in early 2009, like equity real estate investment trusts (REITS).
These companies (REITS) invest in office buildings, shopping malls, apartment complexes and so on.
Up until 2007, they and their shareholders had been on a roll for years.
Investors benefited from rising stock prices and nice dividends.
Then commercial real estate got hit hard and real estate investors had a couple of real bad years.
Now, in this scenario ask yourself this question.
In your search for good investments, would you rather bet on some real estate company you know little about ...
or would you rather bet that the real estate industry in general will recover? The more specific you get in looking for investment opportunities, the more risk you take in the stock market.
Would you rather try to pick the best REIT, or would you settle on just owning a small part of a large portfolio of real estate stocks? If you chose the latter, here's how to take advantage of investment opportunities in real estate or any major industry.
Some of the major mutual fund companies offer specialty funds that specialize in industries or sectors like real estate.
You simply invest in the fund and they look for the good investments, make the stock picks, and manage the portfolio.
You don't need to play the stock market to make money in stocks.
You just need to be invested in the right economic sector or industry at the right time.
In other words, your list of potential investment opportunities has just been shortened to a dozen or so industries groups vs.
5000 or so individual stocks.
Finding good investments in the stock market isn't as difficult as it may seem ...
if you simplify things and don't get too specific.
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