Making Your Stock Market Purchase Decision
As an investor in the stock market, one of the decisions you will have to make is when to buy stocks and the timing of those stock purchases. During the decision-making process you will hear discussions about the current economic environment, including factors such as inflation, deflation, GDP (Gross Domestic Product), unemployment, trade wars, interest rates and other factors. So, which of these factors impacting your decision of when to investment is the most important? For most retail investors, as well as all other investors, the answer to that question should be that those things do not matter. The biggest reason that they do not matter is because you cannot control those external factors and should focus more on developing an equity strategy that can produce reliable and stable returns in any environment.
The biggest key to building an equity-based portfolio that can produce superior and stable returns is to focus on not overpaying for the stock purchases that you make. Also, your investment strategy should be simple, and based on sound fundamentals. In addition to not overpaying for your stock purchases you should be consistent and have a risk management system in place that limits large losses and have a definitive rebalancing cycle that is optimal for the strategy that you employ. Having the right investment approach will allow you as an investor to consistently exploit any market, sector, or industry weakness that often occurs because of retail and institutional investors making investment decisions based on a variety of factors that are not in their best interest from a performance perspective.
As the saying goes in the investment world, there is smart money and there is dumb money. The dumb money, of course, is any investor who randomly buys stocks without any real understanding of why they are making their stock purchases. For all investors it is important to understand that no matter how smart and credentialed you are, there is one thing that you cannot do and that is predict the future. However, if you are smart and have the time and interest, you can create strategies that are effective and that consistently benefit from the stock market missteps made by those claiming to be omniscient. If you should decide to start building your own strategy, make sure that you keep it simple and build from researched concepts. Then try to make your strategy better and suitable to your specific situation. That applies to both retail and institutional investors.
At Investoristics, we use common sense and simplicity when developing strategies which we share with our subscriber base. We do not focus on multiple equity strategies but the strategy that handily outperforms any broad-based index with significantly higher returns and a lower risk profile than any relevant equity-based index.
As investors, keep it simple and control what you can, which is your portfolio creation. Do not worry about all the external noise that you cannot control or predict. If you need an effective equity solution, then join “The Collective” and start generating the returns that can help you achieve your financial goals.
