Page 695 - How to Make Money in Stocks Trilogy

Entering The Dojo: The Decision to Start Investing or to Achieve Greater Results 3

“We are only bound by our limitations to believe.”

—MARK BISHOP, OKINAWAN KARATE INSTRUCTOR

Most people lose money in the market, but it definitely doesn’t have to be
that way.
Contrary to popular belief, you can time the market, or at least you can
put the odds in your favor if you follow a few basic rules, the most important
one being to follow the market’s overall trend.
“Buy and hold” is an investing approach that historically has not worked
very well. As a result of that type of investing strategy, many investors lost
money in the bear market of 2007–2008, not only in their personal accounts
but also in their IRAs. All too many baby boomers are sitting on investments
that are simply underperforming their needs for retirement.
The gift that you have as an individual investor is that you can get in and
out of the market with greater ease than the professional investor who may
take months to fill a huge position in a single stock.
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Investor’s Business Daily (IBD ) has research going back to 1880 to
help guide investors through every type of market, whether bull or bear.
There has also been an in-depth study of the market’s biggest winners and
the characteristics they had in common prior to making their big runs.
Don’t be intimidated by a lack of knowledge or past failure with investing.
Everyone starts somewhere, and even if you haven’t succeeded in the past,
it doesn’t mean you can’t succeed in the future. The truth is, most people
lose money in the stock market because they have no strategy or system that
they follow. Many investors buy stocks because they like the company, or
someone gave them a hot tip, or the stock seems like a bargain because it
has pulled back a lot in price.
It is the institutional investors that drive the money in the market. They
are looking for companies that are making products that are in big demand.
We all know the story of Apple, one of the best examples of a company
that has been completely innovative and created products that were in big
demand from 2004 to 2012. Apple’s innovations have produced skyrocket-
ing earnings and sales that captured the attention of the institutional
investors—the mutual funds, banks, pension funds, and hedge funds.
Finding these big stock market winners is not as hard as you might
think. They appear in every bull market, cycle after cycle. You only need to
look at history as your guide. You don’t need insider information or a rela-