Getting Rich Investing... No Special Skills Required
Written by Sierra Hancock Subject: How To
Getting Rich Investing... No Special Skills Required
Steve
Want to get rich investing?
Today, I'll show you how I've succeeded... The great thing about what I do is you can do it too. No special skills are required.
You don't need to be a math or computer whiz. You don't need to
spend all your waking hours watching stock quotes on your computer or
CNBC.
All you need is patience, guts, some money to start, and two rules...
I've spent my career studying the financial markets starting in the
early 1990s... crunching the numbers in every possible way. I've gone
as far as possible with my education, I've run research departments,
managed funds, and traveled the world looking at investment ideas. But
now that I've done all that, I can tell you that you don't need all that stuff.
You just need to know two simple things:
1. You want to buy when everyone is terrified, but things aren't as bad as they think.
2. You want to sell (or at least get ready to sell) when everyone is optimistic.
(To reduce your risk even more, you want to wait for the uptrend.)
That's it. Extremely simple. No complicated math required. Of
course, I do number crunching to help me pinpoint exactly when we're
seeing these things. But you don't NEED to.
It's obvious when everyone is terrified or when everyone is
optimistic and feeling greedy... You don't need a computer to tell you.
And you can see a clear uptrend on a chart with your eyeballs – no
number-crunching required.
Back in March 2009, we had the perfect buy setup. Everyone was
terrified. But things couldn't possibly have been as bad as everyone
thought.
The stock market bottomed on March 9, 2009. And on March 20, after
seeing the start of an uptrend, I said buy. The headline of my March 20 DailyWealth was "A Dramatic Turn for the Better, Time to Buy Stocks."
The opportunity was as good as it gets. For the only time in my
life, I actually personally borrowed money (through a home equity line)
to buy stocks.
Stocks are up 93% since bottoming on March 9 (as measured by the
total return on the S&P 500 Index). If you took on a little more
risk (as I did, buying things like an India hedge fund), you did much
better.
After that run-up – which has been nearly straight up – investors are now more complacent than I've ever seen.
The only comparison I can remember is the dot-com days back in late
1999-2000 – and you remember what happened next. So based on No. 2
above, you don't want to aggressively buy stocks now.
(Don't forget No. 1 either... Back in March 2009, people thought
things were terrible. The truth was things were getting less bad. Today,
we're in the opposite situation. Investors now think things are getting
better and going to be fine... I'm not so optimistic.)
In short, I've made my biggest gains when investors are terrified
and things are stealthily getting less bad. That's the recipe for big
gains.
We're in the opposite situation today. Trade accordingly.
Good investing,
Further Reading:
In November, Steve told DailyWealth readers about one of the
most important investment lessons to remember. Following these two
simple rules, "you should make a fortune in your investments," he says.
"The trouble is, most people can't follow these rules." Learn them here: The Greatest Investment Lesson You'll Ever Learn.
Despite magazine covers suggesting investors dive back into stocks, Dan
Ferris remains bullish. And though he warns readers to "hold a large
chunk of cash in your account," he doesn't recommend getting out of the
stock market altogether. While his advice may not be exciting, it's
"better than losing a big chunk of money in a dangerous market." Read
more here: A 2011 Investment Forecast Unlike Any Other You've Read.
As Steve wrote a few weeks ago, "Investor sentiment
is off-the-charts optimistic." While it may sound promising that people
are investing again, consider that "the last time the 'Dumb Money' was
this optimistic was back in April, right before the Dow lost a quick
1,500 points in three months." Read more here: It's Finally Time to Sell Stocks.
Jeff may be bearish, but he's got an idea on how to
capitalize off Americans' weight loss resolutions. "Yes, weight loss is
a big deal this time of year," he writes. "And it's big business for
weight loss companies." Learn what companies Jeff's recommending here: The 2011 Weight Loss Trade.
