Stock Market for people with jobs
Part 2
Basic Strategies in Stock Market
Like any other business, you have to have a solid business plan before entering the Stock Market.
The business plan include entrance (buying stocks), exit (selling stocks) and horizon (investment period or duration).
Types of strategies used in the stock market:
Buy Hold and Forget:
Market timing and trading:
Peso-Cost averaging:
Fundamental strategy
Buy Hold and Forget – a technique for people with large sum of money with a long investment horizon. It entails buying a premium stock/blue chips and holding it for 10 years or more. Ignoring all the news you hear about the market because your investment horizon will beat any short term volatility. Example:
Market timing / trading – this technique involves the investor to be fully engage in the stock market. By using stock trending, charts, graphs, and technical knowledge, traders get gains from predicting the direction of the market. This is extremely difficult and high risk. It is not advisable for people with Jobs because it will take a lot of your time and money.
Peso Cost Averaging – this technique involves buying a premium stock regularly at a fixed amount of investment on a regular schedule (monthly). Regardless of the price fluctuation, your average price per share will eventually be lower than the current price.
Fundamental Stock investing – is a type of investing where-in you try to do quantitative and qualitative analysis of a company to derived the fair value of a stock. By actually knowing the fair value, you can know if the current price of the stock is on a discount.
To summarized, the intention of this technique is to buy discounted of cheap premium stock and hold it until you can gain at least 15% gain per stock. (Example is table below)
(Table below is my own personal program and algorithm)
(Table Below is my 5th comprehensive version and algorithm) This algorithm gives me more than 15 % in gains
What do I use?
I usually hybrid of technique but the base is fundamental. I usually advise my subscribers which technique is best per situation.
Stay tuned to our website for further stock market tips and advices. I believe God will only bless you if you are only ready to receive it.
The Part 3 of this series will explain how to use the investment guide.