Dividend Growth Investing, Retirement Income, Stock Market Investing, Stock Market Timing

The 5 Essential Principles of Successful Stock Market Investing

It’s been a year since I started this blog, and that calls for a review of the most essential basics. I made a new friend just yesterday, and she was very interested in learning these. I gave her my card with this site address on it, and said I’d be bringing them back immediately.

No one has ever told me that I did not have them all, or that I’d made it too complicated, so I believe that I may have it just right. There are 5 essential principles to investing in the stock market successfully. Since I employ only these 5 and I have been meeting with success for years with these, I think I may have landed upon something! I say they are these:

1.) Always know what kind of market you are in. Most everyone is aware of the Bull and Bear Markets. But, that’s not enough. There’s also the Transitioning Market between the two. We’ll review what all 3 look like, and how you can find free on-line resources to look at them yourself. You need to know this so as to order your expectations after the market. It is going to tell you what to expect. You’re not going to tell it what you expect!

2.) Know what to buy. Most everyone understands that there are literally thousands of choices in the market. Each one may be appropriate or applicable to a certain kind of investor or trader, but you need to know what the right company stocks are for you! We each have our own unique personality and temperament-type. There is a way that you could either trade or invest, and there are the very issues listed on the exchanges that match your person. All others are for everyone else. You want to learn which kind is just right for you. I found the type for me, and I share that with those who feel and believe as I do. I personally know trading “junkies,” who get their adrenaline “fix” from the issues that they dabble in while they trade. That’s fine for them… That is NOT me!!! I will explain how I find and identify my kind of stock investments (and hopefully chart them soon as well).

3.) Know when to buy. Don’t be fooled by Wall Street. They say that you cannot time the market. That is simply not true. While identifying market tops seems incredibly difficult; for some reason, waiting for, and identifying market lows, where market risk has been largely “wrung out,” is not. I wait, and I am quite good at, identifying what I refer to as “low-risk market entry opportunities.” With the very most recent market action, we may finally be headed for one now. There hasn’t been a real good one since mid-October of last year, 7 1/2 months ago. But, we always get at least one each year, and I have seen as many as 4 in a year. Patience is an incredible investor’s virtue, and I possess that in spades. I’ve been waiting and accruing cash for the next low-risk market entry opportunity all this time.

4.) Know when to sell. You can get the first 3 exactly right, or so you think, and still you’re going to get one wrong. Every experienced trader and investor knows this. You will make selections that just won’t work out for you as you had thought and expected. I will explain the criteria by which I decide to sell one off, as I recently did with Grainger World-Wide (GWW).

5.) Have a goal. This may seem a bit trite, but it is not. Establish a personal investing goal. You’ve heard the expressions before… “If you aim at nothing, you’ll hit it every time.” “If you fail to plan, you’ve planned to fail.” This is true in investing or trading. Nearly all think the goal is to make a million or two. That’s not mine. The actual size or value of our portfolio has nothing to do with anything, as far as I am concerned, and I’ll fully explain why. You have no idea how good it feels to have a goal, and then, as I am able to, measure our progress toward our own personal investing goal and target. What’s yours? Perhaps I’ll be able to help you see and establish one for yourself.

Here’s to your successful investing!
Harold F Crowell


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