Profitable Investing combines fundamental company analysis with market timing strategies and tools that together produce consistently superior investing results.
To help my past investing I talked to financial planners, searched for tools, subscribed to newsletters, read books, talked to financial planners – you name it, I’ve probably done it always with the goal of consistent profitable investing.
Over time I came to the conclusion that there are two major “camps” of stock investment philosophy:
- You can’t time the market so don’t bother, just buy this and hold forever (needs lots of time)
- Buy and hold is dead, aim for a short term home run and then sell quickly (needs lots of effort)
The philosophy of each group is:
Most people in the “you can’t time the market” (group 1) don’t have a clue what timing the market is or can be. Therefore their advice is don’t even try, just buy something and hold forever.
Most people in the short term (group 2) use technical analysis to pursue huge results as quickly as possible with accompanying losses considered inevitable. The hope is that the big wins eliminate losses.
It occurred to me that there is a middle ground that makes the most of the time in the market while owning superior stocks that are increasing in price.
This site is the result of experience analyzing company fundamentals coupled with technical analysis of stocks and the stock market.
After reading this page you’ll understand the profitable investing & market timing strategy:
- Buy stocks when the market is strong
- Identify the strongest sector
- Buy superior stocks in the strongest sector
- Manage position and portfolio risk to capture the maximum profit
- Go back to number 1…….
Want to become a better-than-average and consistently profitable investor? Then read on…..
1) Profitable Investing works best when the market has a high probability of going up
That sounds like common sense doesn’t it?
So how do you know when it’s best to buy vs just sit on your hands?
Take a look at this chart.
Do you think you would have better results focusing stock purchases in the green boxes and taking profits in the red boxes?
I certainly do!
This doesn’t mean you should “time” the market – I hold good stocks as long as I can.
But I’m not going to let my portfolio sink 40 to 50 percent without taking action.
I used to create this chart by hand, now I just take a look at the market guide at the top of every page on this site.
The market guide is updated after every market day. It now shows me at a glance what box we are in.
It’s amazingly useful!
Come back and check it daily.
2) If the stock market is going up what should I buy?
OK, so now you’ve been monitoring the market guide (top of each page) daily and now it’s in the green zone.
What do you do now?
Well before any stocks are purchased it would be great to know which sector of the stock market is the strongest. Think of a sector as a stock market within a market of stocks.
What if financial stocks are going up and health related stocks are going down. Clearly the most profitable investing would be in stocks belonging to the financial sector.
But how do you know which sector is the strongest?
I have the answer for you!
This is an image of the daily stock market and sector strength table.
It shows at a glance exactly what you need to know about sector strength.
The top two rows shows the overall stock market strength.
The other 10 rows shows the strength of each individual sector.
Click the image to view today’s table.
The more green boxes you see the stronger the sector.
The more red boxes you see the weaker the sector.
How easy can it get?
3) Now we are getting somewhere, the stock market is strong, you’ve selected a strong sector, now what?
Now all you have to do is select a strong stock.
Once again I have a solution for you.
Every week I go through the entire stock market and find the 100 most consistently profitable and fastest growing companies and stocks to buy.
Many of these companies do not make the nightly news. They are not typically “headline” stocks.
But they are fantastic for a profitable investing strategy. They make money now, and they are likely to make more money in the future.
I publish this list on the stock watchlist blog at the end of each week.
You can search and sort watchlists by stock and sector.
See if the stocks you own are in the current watchlist!
4) Everything has has lined up so far…
The stock market is strong, you have selected a strong sector, you’ve selected a strong stock to buy…
Now the last decision is “how many stocks should I buy”?
That used to be a really tough question for me. I’d talk to experts and financial planners and the answers were all over the place.
They would say things like… As many as you can afford… It depends on what the target price is… Invest 10% of your portfolio… etc
None of those answers are very useful.
Here is a strategy that manages risk but still buys enough shares to be profitable when the stock price moves up:
- Figure out what price you would sell if the stock price moves against you
- Calculate the risk per share by subtract the stop price from the buy price
- Use the risk per share to calculate the number of shares that put no more than 1 to 2% of your total portfolio at risk.
This sounds complicated but it’s really very simple
I even provide a simple calculator for your use so you can size your risk managed position in second.
Click the image above to use the calculator.
Congratulations! You’re well on your way to above average investing results.
There are many more free resources and information here that you will find useful.
Click the image or this link to view the website update schedule.
By far this method of investing in stocks is the most profitable that I have discovered.
I’m so confident of it’s usefulness that I publish my buy and sell activities at the end of every week!
Visit the current portfolio.
When I buy a stock I’ll tell you and I’ll explain why.
When I sell a stock I’ll tell you and I’ll explain why.
I’ll also tell you if I made or lost money on every stock sale.
Every week I post the complete portfolio holdings, how long each position has been held, current gains, current losses, and current sell price levels.
All so you can follow along and become a better than average investor!