We’ve long relied on these 3 stock market investing tips to find stocks to recommend in our investment newsletters and services. We think they can help you pick winners, too. (Our special report, “Stock Market Investing Strategy: Pat McKeough’s Conservative Investing Guide for Making Money and Cutting Risk,” is full of lower-risk investing strategies you can easily put into practice right away. Click here to download your copy now.)
- Think like a portfolio manager: Portfolio managers gather information from companies, industry studies and other sources. A good portfolio manager then tries to build his or her client a portfolio that makes money if things go well, but won’t lose too much if the opinions sometimes turn out to be faulty.
We do our own research for our newsletters and investment services, and we apply it from a portfolio manager’s perspective. That’s why we advise sticking to well-established companies; they tend to hold on to more value when things go wrong, or at least recover eventually.
Bad times usually hit some market segments much more severely than others. That’s why we advise spreading your money out across the five main economic sectors: Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities.
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- Balance your holdings geographically. Avoid focusing your investments on any one country or region. A lower-risk way to add international exposure to your portfolio is to hold multinational U.S. stocks, such as IBM, Yum! Brands and McDonald’s. We cover all three of these companies in our Wall Street Stock Forecaster newsletter.
What’s more, today’s low U.S. dollar provides you with a rare opportunity to add high-quality U.S. stocks to your portfolio at bargain prices. - Maintain a healthy sense of skepticism: A cardinal rule: If an investment sounds too good to be true, it probably isn’t true. Recognize too that some of your most promising investments will disappoint you, since no one can predict the future.
Remember, the investment business deals in intangibles and relies on trust, so it attracts more than its share of crackpots, dreamers and crooks. They have an uncanny ability to home in on trusting investors who accept dubious claims at face value. But if you follow a stock market investing strategy of diversifying and focusing your investments on well-established companies, your gains will overwhelm your losses.
As a member of TSI Network, you may have already seen “Stock Market Investing Strategy: Pat McKeough’s Conservative Investing Guide for Making Money and Cutting Risk.” If you haven’t yet read this new free report, click here to download your copy today.
