Page 1015 - How to Make Money in Stocks Trilogy

8 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

Tips on How to Generate ETF Profits
Check out a short video that shows how you can use stop-loss orders
and other simple steps to help generate substantial returns at
www.investors.com/GettingStartedBook.

Basic Game Plan for Making Money in Individual Stocks

Now that we’ve seen how you may make substantial profits investing in
index-based ETFs, let’s see how to potentially capture even larger gains by
buying and selling individual stocks.
Keep in mind: In a strong uptrend, the top-rated CAN SLIM stocks typ-
ically go up much more than the Nasdaq or S&P 500.
For example, from the start of a new bull market on March 12, 2009,
through May 4, 2010, when the market slipped into a downtrend, the
Nasdaq gained 70%. During that same period, the market leaders of the
time shot up even more: Lululemon Athletica (522%), Ulta Beauty (322%),
Baidu (309%), Priceline (231%).
Of course, let’s manage expectations and be realistic.
Not even the best investors capture every last dollar of a big winner’s
move. (In fact, trying to do that will just get you into trouble as we’ll see
later.) But you can lock in a good-sized portion of those huge gains—and a
little piece of a 300% move means a nice boost for your portfolio.
Yes, it takes more effort and elbow grease to tap into those potentially
“monster” gains in individual stocks, but that’s why you’re reading this book,
right? And once you get familiar with the routines and checklists, I think
you’ll be pleasantly surprised at how you can do this by sticking to a step-by-
step approach. (To see what I mean, check out the Simple Weekend Routine
in Chapter 4).
And I’ll show you how to get started, one step at a time, using easy-to-fol-
low checklists. We’ll start right now with a quick overview of the basic 3-step
game plan.