AHEAD OF THE CURVE

Investors that are successful in managing their portfolios are always AHEAD OF THE CURVE.  Good investors should always be forward looking and able to see future trends of the economy and the market segments they are investing in. 

AHEAD OF THE CURVE ATTITUDE:
  • Be Well Informed
  • Ahead of other investors by taking the forward looking attitude
  • Understand product and business life cycles
  • listen to economic indicators
  • Constantly looking for opportunities of growth

BE WELL INFORMED
Taking a few minutes of your time a day reading articles about business and the economy can make a difference.  Knowing what is going on, understanding the trends, knowing what is the next generation technology, getting to know the new products, knowing the Market Indicators can make a difference in making your decision on which stock to invest in.  A sample of this is when Apple released the first iPOD and had a press conference.  Knowing a new product from a company under a leader with a good track record of introducing new products to the market led to Apple's stock price to increase.

AHEAD OF OTHER INVESTORS BY TAKING THE FORWARD LOOKING ATTITUDE
Knowing the news is not just enough.  Good investors know how to translate what they read in the news.  They understand the CAUSE AND EFFECT of each news they read to the market combining it with other factors.  They know how to think outside the box.

UNDERSTAND PRODUCT AND BUSINESS CYCLES:
Products and Business have cycles.  They start as a question mark.  These are IPOs, new ventures and newly created companies.  They are called question marks because we don't know if they are going to be successful or not.  Second Cycle is Stars.  These are companies that are growing.  They have successful product lines and are in demand.  The third Cycle is CASH COWS.  These are businesses that are earning money in some of it's segments and are loosing in some of it's market segments.  The segments they are loosing money on can be turned around or liquidated.  If the loosing segments these companies have continues in the long run the will end up in the Fourth Cycle. Fourth Cycle are Dogs.  The company is not making money at all.  As you can see knowing where the company is in the Product and Business Life Cycle can make a difference in how you will invest your money.

LISTEN TO ECONOMIC INDICATORS
Simply said "MAKE ECONOMIC INDICATORS YOUR BEST FRIEND." Economic indicators can give you an idea where the market is going.  Example of these Market Indicators are:

  • Fed Rates
  • Unemployment / Jobless Claims
  • Inflation
  • Manufacturing Index
  • Volatility Index
  • Housing
  • Home Builders
  • 10 Year Bond
  • Gold Prices
  • Oil Prices
  • Purchasing Index

ALWAYS LOOK FOR OPPORTUNITIES
In order for you to continue growth for your portfolio you need to always look for good opportunities and evaluate each of these opportunities based on Risk and Return.

 

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