What is a good stock market strategy?

Question

so many analysts, and commentators it makes my head spin. What is the best stock market strategy and where can i get details about it?

Answer 1

Take next years expected earnings and divide by the current stock price.  Thats called the earnings yield.  Its the inverse of the P/E ratio.  You can find next years expected earnings on Yahoo finance and other sites.  Subtract the yield on the ten year treasury note from the earnings yield.  You can find the yield on the ten year note on Yahoo also.  The result is called the risk premium.  That is the expected return.  Choose stocks with a risk premium of at least 10-12 percent.  Thats about what the market returns in the long term and you need a cushion in case they lower earnings estimates and for changes in the yield on the ten year note..

Answer 2

Depends on where you are in your life.  I'd read up on various websites like yahoo finance, msn money, motley fool to get an idea.  Many time s the tv guys are trying to entertain and sell advertising space.

I'm a buy and holder.  I look for companies that have a solid business with consistent earnings and a dividend that I can reinvest.  I try the Buffet way and look for products 'with a moat'...meaning no one elses product is as good.  Most of the stocks I purchase cost less than $40/share.  I try and find things out of favor with the market...Which you will find does not always trade on logic.

Recent purchases have been GE, BAC, NTGR, VMW, PFE and I'll keep them for a while.

Good luck.

Answer 3

Technical Analysis.  unbiasedstockanalysis.blogspot.com.  You can take the online courses from your online broker too for free.

Answer 4

Understanding is the best strategy.  When I say understanding, I am talking about how the market is broken down (sectors), the companies financials (debts, earnings, yields), is there a need for the company, and many other factors.  Its definitely not a get rich scheme fast unless your willing to bet the farm, everything!  My suggestion is learning about the markets which can take years or just get a money manager to help you.

Answer 5

the basic buy low and sell high.  all there is to it.  all the analysts and 'commentators' as you put it, simply build timing around what systems work for THEM, NOT for what works for you.

take the time to study and learn.