Beating The Stock Market

Is it possible to "beat the stock market"? In theory, yes, it is something that investors can do. But as you'll see, it often takes a combination of skill, luck, and good old-fashioned hard work.

First of all, you have to change the way you think about yourself as an investor. Consider yourself to be an "involved" investor, rather than a passive one. To do this, you may earn a profit by hanging onto your stocks for a short amount of time, purchasing stocks when the prices fall due to market fluctuations, and then selling them later on once the price appreciates. Ideally, you should get about a 10-15 percent profit when you do this because these days, the stock market is very unpredictable and it can be hard to get anything more substantial. So in other words, buy low when you can and sell a bit higher, but not super high expecting to make the big bucks. In this case, holding onto your stocks with the hopes of making huge money is just greedy thinking that probably won't net you any significant profits.

Another thing to keep in mind when trying to beat the stock market is to try using speculative ways or methods of trading your stocks. You can try short-selling them, or trying options or futures. Also, whenever possible, purchase value stocks. If you have more time to work with, you may buy these stocks now and hold onto them until they increase in value.

Additionally, some stock holders have had luck using what are called technical indicators to purchase their stocks for a really super short amount of time, and then turning around to sell them pretty much right away. This practice, known as "day-trading", can help you sometimes earn some money in the stock market but it does come with inherent risks as well, and also higher tax rates. So be careful if you employ this method.

In general, doing better than the stock market is easier said than done. When it's a "bull" market and everything is going well you may be able to make some money because things are selling higher and stocks are doing well. But in a "bear" market, when prices are low, it can be very challenging. You have to use a combination of "grits and wits" to beat the bear and earn some profits. During these times, only the truly dedicated and shrewd traders will probably make any money in the stock market.