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Three market beating strategies to help you come out tops

by , 08 July 2014

Picking the right stocks to invest in isn't an easy feat. You just have to look at how many unit trust funds don't manage to consistently beat the market over the long-term. But there are some investing strategies that stand you in good stead to beat the market at its own game. Read on to find out more about these strategies…

Market beating strategy #1: Invest in ‘value’ shares

This investing strategy was to down Benjamin Graham, the ‘father’ of value investing. Warren Buffett took this strategy and upped its game.

The strategy involves buying shares in companies that are undervalued compared to their sales, dividends, earnings and book value.

You’re basically looking to invest in shares that are trading for less than their intrinsic value, Alexander Green in Investment U explains. Pick the right shares here and you’ll beat the market average.

Market beating strategy #2: Invest in ‘growth’ shares

This strategy’s in stark contrast to strategy number one. It involves buying shares that are of a high quality and are trading at an expensive price.

A recent study conducted in the US found that by investing in growth shares, those with high profitability and earnings growth, beat the market’s average performance too.

The only drawback with this strategy is if the company disappoints with any of its results, its share price will plunge. This makes these types of shares notoriously volatile.

Market beating strategy #3: Contrarian investing

This is perhaps the simplest strategy of the three. It involves looking at human emotions and that history has a tendency to repeat.

Do the opposite of what other investors are doing.

For instance, if the majority of investors are selling and scared of what lies ahead in the market, buy. When the majority of investors are very confident about the future and their performance, sell.

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Of course, the drawback with this strategy is timing. But if you can do the opposite of what the crowd is doing, chances are your portfolio will benefit over the long-term.

So there you have it, three market beating strategies to help you come out tops.



Three market beating strategies to help you come out tops
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