You have cash to invest and want to start profiting from the stock market right away. The problem is your experience isn’t great but you want to improve your chances of making money. You’ve heard friends talking about timing the market and you’re thinking maybe this how to get your first million. Problem is, none of your trading friends are rich. So, you know market timing probably won’t work for you.
What can you do differently?
Usually a good solution to these kinds of problems is to get clear on effective investing strategy, upgrade your information sources and improve your peer group. First, let’s review why market timing doesn’t work, then discuss potential solutions.
Emotion and Overconfidence Means You Need An Alternative To Market Timing
Typically buying and selling in and out of dips or switching assets around doesn’t make money. Why? The problem is anticipating which investments will perform is practically impossible. Human emotion and psychology typically get in the way.
Many investors react emotionally to situations. This leads them to invest in an irrational manner. For example, when the stock market drops, people pull money out. When it reaches record highs, investors put more money into the market. The entire approach fails if you’re hoping to earn a strong return.
Other people are overconfident. They assume that they can perform the research necessary to make smart decisions.
However, even professional fund managers don’t always get it right when it comes to market timing. This makes choosing a mutual fund difficult as funds are only as good as their managers.
Newsletters are often a good solution to this. Let’s explore one of them below.
Motley Fool Stock Advisor
The Motley Fool Stock Advisor is a stock picking service run by The Motley Fool, LLC. The Motley Fool LLC is a diversified financial publishing company founded by Tom and David Gardner in 1993. They sell a number of mass market premium advising services. Their flagship product is the Motley Fool Stock Adviser.
It’s awesome. For a number of reasons.
Motley Fool Picks Have Outperformed the S&P 500 Since 2002
First, the founders Dave and Tom Gardner have managed to figure out how to select winning stocks. Performances of the recommendations are working well. Since the newsletter became available in 2002, Motley Fool picks on average have outperformed the S&P 500 by more than three-fold.
The Motley Fool’s methodology also takes a lot of the emotion out of investing. So, the Motley Fool picks effectively solve the emotional problems associated with market timing for you.
Access To Professional Quality Analysis
The internet has a large number of voices weighing in about investing. Not all of these are equally valuable. Instead, careful investors should focus on reputable sources.
By subscribing to the Motley Fool Stock Advisor newsletter, you gain access to expert-level advice without the costs associated with working with a financial advisor. Since the founders lead the teams selecting the stocks, you’ve basically got access to the best brain power the company has to offer. Tom and David Garner’s biographic sketches on available on Britannica.com if you want to learn more.
Comprehensive and Useful Recommendations
The Motley Fool Stock Adviser has stock picks for a broad set of investors. Including both growth and value investors.
The Motley Fool Stock Advisor newsletter also keeps you up-to-date on past recommendations. Allowing you to see how stocks performed after they are included in the newsletter. This includes whether you should buy more, hold your investment, or sell. Here is a screenshot of their current stock recommendations. The interface is simple and clean.
You’ll receive a list of new Motley Fool picks every month, allowing you to take advantage of current market conditions.
Plus, new investors can benefit from the “starter stocks” picks each year. They feature lower risk investments that can help investors increase their comfort level as they begin building their financial futures. The starter stocks are almost all quality choices. They aren’t garbage penny stocks or companies with obvious earnings problems.
Here are some example selections from the Motley Fool picks starter list:
ANET: Arista Networks
MAR: Marriott International
All of these are profitable enterprises with clear paths to future growth.
Access To Community
It goes without saying, upgrading one’s peer group is a key part of success. One outstanding feature of the Motley Fool Stock Adviser subscription is access to their online community.
The Motley Fool’s website maintains forums for each of the companies they cover and they have infrastructure for interacting with the The Motley Fool’s stock analysts. More importantly though, the community is comprised of people who are paying for stock advice, which means they’re serious and motivated about investing. Access to this peer community is excellent for people who want to optimize their return on investment.
My Final Thoughts
I recommend the Motley Fool Stock adviser. For investors who are looking to be in the stock market, and want to be actively buying and selling stock, you’ll need a check against acting emotionally or getting caught trying to time fluctuations in the market. With access to reliable stock picks and their robust online community, paying $199 a year for the Motley Fool Stock Advisor is an excellent value for the money. If you’d like to sign up, here is a promo link to get a free trial.
Here is a handy tour of the service if you’re considering it.
Disclosure of Material Connection: Some of the links in this article are “affiliate links.” This means if you click on the link and purchase the item, dinksfinance.com will receive an affiliate commission – which will help keep the lights on. Regardless, I only recommend products or services we believe will add value to our readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
Image credits: fool.com, amazon.com.