How to Make Money in a Down Stock Market
My clients often ask me if they can still make money trading stocks even when the stock market is down. The answer depends on the kind of holdings an investor has.
The answer is no if you are holding your investments in a stock fund, mutual funds, or other standard asset allocation accounts. The reason for this is that these large accounts are regulated and do not allow short stock positions. Therefore, if the market declines in the next 3-5 years, as it most likely will, your account will lose money year after year.
Using the short position strategy, though, will give you the leverage to make money both when the market is up and down. But you can only take advantage of short positions if you trade through an individual account.
Trading through an individual trading account rather than a fund gives you the leverage to control your investments and make profits daily. The reason for this is that you can buy low if you expect an increase in the stock value, or sell short if you expect it to decline.
If its that easy, why isnt everyone doing it? For one thing, it requires approximately $25,000 to set up an individual account. Many people dont have that kind of investment or are unwilling to risk it. And, it is true that stock trading for a novice can be very challenging. If you do not know what you are doing, you can lose all your money very quickly.
There are tactics to alleviate these two concerns of the novice trader.
Your first goal is to find a program that will provide you low risk stock recommendations. Me and my coaching clients use a program that boasts stock pickers with 31 years average experience. With such experienced pickers, a trader can follow their picks with a high probability that they will profit from the trade. And, if you also set your stops at a low risk level, your loss over time will be small.
Secondly, its important to find program that walks you through every step to success. For example, in my 9 day trading class the students learn every aspect of using a turnkey system that is both safe and profitable to buy and sell short stocks, so that you can make money even if the stock market goes down.
The goal with any system you choose is to find one that will give you stock trading success while those around you complain over poor performance; by making sure that you are working with experienced advisors and a step by step process, you can achieve that goal. - 23229
The answer is no if you are holding your investments in a stock fund, mutual funds, or other standard asset allocation accounts. The reason for this is that these large accounts are regulated and do not allow short stock positions. Therefore, if the market declines in the next 3-5 years, as it most likely will, your account will lose money year after year.
Using the short position strategy, though, will give you the leverage to make money both when the market is up and down. But you can only take advantage of short positions if you trade through an individual account.
Trading through an individual trading account rather than a fund gives you the leverage to control your investments and make profits daily. The reason for this is that you can buy low if you expect an increase in the stock value, or sell short if you expect it to decline.
If its that easy, why isnt everyone doing it? For one thing, it requires approximately $25,000 to set up an individual account. Many people dont have that kind of investment or are unwilling to risk it. And, it is true that stock trading for a novice can be very challenging. If you do not know what you are doing, you can lose all your money very quickly.
There are tactics to alleviate these two concerns of the novice trader.
Your first goal is to find a program that will provide you low risk stock recommendations. Me and my coaching clients use a program that boasts stock pickers with 31 years average experience. With such experienced pickers, a trader can follow their picks with a high probability that they will profit from the trade. And, if you also set your stops at a low risk level, your loss over time will be small.
Secondly, its important to find program that walks you through every step to success. For example, in my 9 day trading class the students learn every aspect of using a turnkey system that is both safe and profitable to buy and sell short stocks, so that you can make money even if the stock market goes down.
The goal with any system you choose is to find one that will give you stock trading success while those around you complain over poor performance; by making sure that you are working with experienced advisors and a step by step process, you can achieve that goal. - 23229
About the Author:
W. Alan Gay has been a day trader and stock trading mentor for fifteen years. His free report describes Alan's journey to becoming successful at trading stocks and gives useful tips he and his students have used to repeatedly trade profitably. Click to obtain a free copy of his report and learn more about how you could be trading stocks profitably in as little as two weeks.
posted by X - Men @ 2:13 AM
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