It is fascinating how the stock market is unpredictable. It is filled with a lot of mellow drama such that people are always seeking predictability, scapegoats and blame. The investors add to the melodrama by being controlled by the media.
However, the Stock market should be viewed differently. It is a place where every person is entitled to reasonable returns. Investors should understand that there is no market with, which has consistent rising prices. Even the bond market has no continuous rising interests. Therefore, this is a mythology of investing.
However, the strategy of investing is simple. Even Wall Street cannot let out the secret. An investor should be careful not to be controlled by the media. They should follow the prices of the market. When there is an increase in the prices, you should sell the prices to make a profit. However, at one point the prices will fall. It is at this point that an investor buys the stock to replenish his portfolio. This strategy requires patience because investment is long term.
What is important to note is the working capital. You should take care to reposition the working capital and your portfolio to achieve the goal of making profits in the future. You should manage your portfolio, unlike DJIA. DJIA did not manage its portfolio leaving to become unproductive investments for a long period. This is a pace that no investor can afford. An investor will need to have highs and lows. At the different moments, the investor should counterbalance this stock to ensure that he is maximizing on the opportunities.
Therefore, there are five simple Asset Allocation plans for your investment. These are known as "The Investor Creed".
• I need an investment that fully utilizes my equity/ fixed income asset allocation.
• All the securities that I have acquired should be for sale generating a cash flow for a later investment.
• I am not worried with a zero cash balance, because it is invested.
• I am happy when my cash is at 100% balance for I know that I have made a huge profit from the sale.
• I shall always take advantage of a profitable investment.
Manage your portfolio properly and see you cash position rise. Sell your overpriced stock and get profits along with everyone else that managed their cash. Do these before Wall Street starts putting counter measures. This is "smart cash" from interests, dividends and profits waiting to make more cash.
By getting to know as much as you can about this, you will be in a good position to be able to learn the best way of maneuvering the stock markets, and most importantly, how to make a worthwhile investment every time and again. Therefore it is important for you to try and make sure that you are as keen as possible on all the aspects of the stock markets so that you can get the best out of it all. Besides, it is your money that is at stake and for the same reason you should make sure that you trade carefully.