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In today's twitchy stock market some traders believe the only way they can make reliable profits is to have some short positions in their portfolio. Hedge-fund managers make enormous profits for their clients by short-selling as often as they buy long. Picking stocks for short-selling is a tricky process, though, since the stock should move against the normal trend of the market in order to produce profits.
It's very difficult to truly hedge on sector bets. During downturns, many investors flee to "recession resistant" industries and firms. And while it's not necessarily a bad idea to allocate funds somewhat cautiously, even the cleverest investors don't throw all their money into a small number of industries with the expectation that they will be able to reallocate to bull-market favorites right before everyone else does.
Oil, coal, and alternative-energy sources are being ballyhooed by many of the online investment sites as Top 10 stock picks now, plus platinum, gold, stem-cell research companies, and agriculture. Some top market strategists have opined that stocks will make only limited upward movement before year's end, which is why they are favoring sectors like technology and energy over defensive havens such as utilities.
Experienced day-traders recognize that trading hot stocks on momentum can be the quickest way to make money in the stock market, especially during rocky times.
It's an art. Or maybe a science. You have to learn how to take advantage of them when you encounter the best opportunities for going long, or for shorting them to make money when they're on the brink of collapsing.
Well known investors like Warren Buffett, Marty Whitman and Chuck Royce suggest that the smart thing to do right now is to continue to invest in notable companies at realistic prices. The market is most likely to remain volatile in the short run, so it makes sense to gradually add money to the strongest companies across a variety of sectors.
When you know how to pick and approach the best hot stock-trading opportunities, you're able to generate a consistent and respectable amount of money in a reasonably short time. If you'd like to peruse savvy Websites for Top 10 stock picks, take a gander at Motley Fool, MSN Money, Speculating Stocks, and StockPickr, which offers Barron's Top Strategist's Stock Picks. |