Investing in the stock market has always been risky. Even the most conservative of investors have had their shares of ups and downs. In Wall Street’s Just Not That Into You, Roger C. Davis shares a less traditional way of investing in the stock market, one in which current market trends are given a more important role in deciding where to invest. This tactical investment strategy reduces losses that many of the long-term-hold strategists accept as a normal part of the market.
Stock market investing can seem like a nauseating roller coaster ride at times. While the ups and downs of the market are inevitable, the losses seen by most long-term-hold investors can be minimized when they take a more tactical approach. The basics of this tactical investment approach include:
- Analysis of current market conditions. There are trends in the marketplace that can be observed and recorded and that can expose critical information. Investing alongside these trends rather than against is crucial.
- Availability of favorable investment opportunities. The traditional rules of investing, where older people nearing retirement must stay away from riskier stocks and younger people must stay away from safer stocks, are no longer valid. What makes an investment favorable is much more complex than that the investor’s age.
- Risk management. While no one can predict the future, certain indicators have historically preceded significant tops for both individual stocks and the market in general. Understanding these indicators goes a long way in reducing risk.
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