I ask you one simple question. I give you $200 and ask you to select a stock that can turn this $200 into $1 Million in the next few months to a year. Can you do that? Definately yes, if you know the art of scientifically selecting stocks!
Here’s how an ordinary investor can cash on huge profits! You must be thinking how do you find such stocks that can make you rich. You can do this by following a 4 step investing system.
First, you need to know the internal strength of the stock market. What I mean by the internal strength of the stock market is by the fact that many stock exchanges have a stock index associated with it. These stock indexes are used to measure the market sentiment. But the actual truth is the fact these stock indexes are mostly value weighted or price weighted and based on some few hundred stocks. Out of these few hundred stocks, only a few dozen dominate these stock indexes.
But measuring the market sentiment is not as simple as taking a look at the stock index. Let’s use an example to elaborate on it. Dow Jones is a price weighted stock index based on only 30 stocks. This means that it is heavily influenced by the prices of those 30 blue chip stocks. But there are thousands of stocks listed on NYSE. So definately, it is not a true measure of the market sentiment.
S&P 500 Stock Index is considered to be a barometer of the US Economy. It is value weighted and based on 500 stocks listed on NYSE, NASDAQ, AMEX and other US Stock Exchanges. You must be thinking that S&P 500 is a good measure of the US market sentiment. To tell you the truth it’s not either. It is heavily influenced by the 50 stocks in it and half of it’s movement is just based on these 50 stocks.
Market sentiment can only be measured by knowing the internal strenght of the stock market. Infact, there are two stock market. One is the most obvious, the external stock market that is infront of your eyes and you can get a feel of it by taking a look at the Stock Indexes based on the stocks listed in thes stock market. But infact, there is another internal stock market hidden to most of the people that actually reflects what the market is thinking. If you can discover that internal stock market and drill it down to individual stocks in different weak and strong industry sectors, you have found your super stocks.These super stocks will have the potential of skyrocketing in the next few months.
Once, you have identified the super stocks, you can build your portfolio in such a manner that your risk is hedged and your profits are maximized. So if you have a system that can give you the best stocks and you know how to build your portfolio with those stocks, you can get incredibly rich without ever doing anything. This is the essence of investing! Follow this system and you can turn $200 into $1 Million over and over again!