Tag: rising stocks

What are rising stocks—and can you consistently pick them?

Investors are always looking for rising stocks that have yet to reach their peak price. But when it comes to adding value to your investing efforts, one of the least productive things you can do is to try to “time” the market. By that, I mean attempting to sell good stocks at what looks to you like a price peak, in hopes of buying those no longer rising stocks back at lower prices.

Sometimes they’re right, and they sell rising stars at exactly the right time to make a huge return. Other times, they’ll sell rising stocks at what looks like a high price, only to find that some new information comes along that spurs the rising stock to much higher prices. Sometimes, they’ll sell rising stocks that look “high,” then use the money to buy something else that looks cheap. But your cheap stocks get even cheaper while the rest of the market continues to rise.

You’ll often meet investors who are eager to tell you in great detail how they determined a rising stock was a bust. And that the particular stock, or the market as a whole, was over-priced, and how they sold just in time to avoid a 10% or 20% downturn. Avoiding a downturn feels good and makes a good anecdote, but that’s not the same as making money.

It’s all too easy to sell a stock that looks like it’s headed for a downturn, only to buy another that is headed for a collapse. For that matter, if you make a habit of selling whenever you feel the market’s risk has gone up, you will wind up selling your best stocks way too early.

At TSI Network, we recommend using our three-part Successful Investor philosophy:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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