November 17, 2011 | In: General

Stock Market Best Kept Secrets

Like any other profession, trading in the stock market has its best kept secrets that will make you money. Here they are:

  • The January Effect: Rare are those who know about the January Effect, when stocks go down in December and then go up until mid February (see the best time to buy stocks).

  • The commodities yo-yo: Unlike what many investors think, commodities ETFs are the best and the safest way to make money in the stock market, this is because commodities experience cycles all the time: They go up and then they go down and they go up… If you don’t believe this, look at oil and gold ETF stocks. Note that I have discussed how you can take advantage of this yo-yo in my article about HOU and HOD.

  • Sure shorts: There are many sure shorts out there, including, but not limited to NFLX, YHOO, RIMM. We all know that the future of these companies is very dim, and they are already trading at a much higher price than the one they should be currently trading at. Take advantage of them and short them.

  • The 2012 curse for bank stocks: Is the recession over? Apparently not, and Europe has now caught the virus: Financial experts all over Europe are sure that next year will be a recession and there will be lots of defaults in the European banks. What does that mean? That means smart investors are avoiding bank stocks and smarter investors are shorting them!

  • The hammered stocks and the sure rebound: A hammered stock is ultimately set for a rebound if it has been hammered for the wrong reasons and yet its company’s fundamentals are great. Buy it and wait for it to make you rich!

  • The married puts: Married puts are one of the most practiced “secrets” that smart investors take advantage of in order to protect their investments in the stock market.

  • Contrarian investing: When everyone is telling you to jump in, get out. This is the time when the market decision makers are selling, and they want to sell at the highest price. Alternatively, when everyone is saying to avoid a stock like the plague, then jump in, this is the time when the big players want to buy! Be sure to apply these rules only in commodities ETFs (oil and gold).

  • A confident you: Last, but not least, the best kept secret in the stock market is your confidence. You should be confident in your stock picking skills (you’ve done your research back when you bought the stock, didn’t you?). You shouldn’t be afraid. Leave fear, greed for other investors and always be patient and confident.

  • This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

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