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Chapter 1: A Guaranteed Way to Make Money on the Stockmarket
Many people search the full proof way to make money in the stock market every day. Many of those people never find it or find that there is just too much risk involved with investing and choose to avoid it all together. However, are those fearful people missing out?
In my opinion the answer is a definite and most certain yes. Unless you are one of the lucky trust fund babies or you won the lottery, I think stock market investing is a sound way to make a good steady return on your available cash. Well, this is only the case if you know what you are doing of course.
Many traders, especially new traders jump into trades too quickly without thinking and do not do their research. Of course, once they start losing money in the trade they get discouraged very quickly and wow never to invest again. However, this is the wrong way to go about things.
First of all, proper research needs to be done before entering any trade. The trader needs to have some idea about the return they plan to gain from the trade and when they would exit the trade if things do not go well. This is a good way to limit risk.
Losing money is a stepping stone to making money. In trading just as in everything else in life you cannot be successful all the time. As a new trader there is a good chance that you will first fail before you finally succeed. They key is to learn from your mistakes and try to make a positive outcome of those mistakes in the future by trading the right way.
As mentioned in my previous hubs, currently I am long BRCM. Now the worst days of this stock are seemingly behind us and it is slowly but surely going up. I am waiting for the stock to hit $28.30 per share and at that point I will sell it off.
I do not have a lot of confidence in the profitability of this company, but being that it is a fortune 500 company that has a good amount of assets and business going for it I do not think that they will be going out of business any time soon. I doubt that bankruptcy is an option here. This was my first trade placed in the end of July at a price of $27.30 per share. I have to admit that I thought that I would be in the profit a lot sooner, however, it looks like I have to be patient at this point. A lot of analysts have their price target set at $30.00 per share with this stock so it should easily reach my target price of $28.30. This stock moves very slowly like a stubborn turtle, but I believe by the end of the year I should be seeing a small return on my investment so wish me luck.
Now about the full proof way of making money on stocks. My current strategy is to look of stocks that are under heavy accumulation not just by the general public, but by the large financial institutions. These insiders know things about these companies that the average person would not know no matter how much research they do. Of course I always recommend to research any company before investing, however, other than the level of general reliability, valuation, and net worth, it is tough to tell whether the stock is going to go up or down.
To me personally, a large spike in volume due to aggressive accumulation from institutional investors signals a good buying opportunity. By the same token, a large fall due to an aggressive selloff by the institutional investors signals that you may want to sell or short the stock.
A stock that looks particularly attractive today would be Zillow (Z). This is an internet real estate giant that has been recently trying to connect more with their customers as far as explaining to them all the different discounts they can get by purchasing real estate. The mortgage rate has been dropping steadily and Zillow is in the middle of all the good action. Did I mention the company is buying back their own shares? Value will go up and investors should take notice.