The world of stock market speculation is chock full of promoters (scammers, really) trying to unload their worthless shares to anyone at any price because anything above zero is a huge profit to these people. You could run the other way with despair and swear you will never listen to another soul about stocks. Or, you could tip the scales in your favor with some money management.
A few years ago I wondered how anyone could successfully speculate in the stock market before the age of computers, trading software, and algorithms. After all, speculation is as old as dirt and computers are relatively new. Then I came across rather simple quote, "Wealth is gained by the steady accumulation of an asset when its outlook is the bleakest." It took a few beers to digest this concept but it allowed me to come about with a rather crude way of creating a large amount of money from a really poorly performing stock.
Let's say five years ago you were duped into buying $5000 of shares of MRNA, a biotech stock, at $25 per share. You would have watched it steadily decline in price to its current price of $0.35 taking over 95% of your principal with it. Most people would have sold years ago or held onto it praying for a rebound. Or you could use that super basic strategy of dollar cost averaging to give yourself a fighting chance at making a profit.
If you could go back to that day when you first bought MRNA and only bought $1000 of shares and keep the rest in cash for the future you would have 40 shares. Then wait. On the anniversary the share price was $1.25 and you buy another $1000 worth or 800 shares. Repeat the next two years when it was steady at $0.25 and you could pick up another 8000 shares. Most advisors would tell you never to throw good money after bad stocks but this is speculation and it is almost required because you are "accumulating an asset when its outlook is the bleakest." Now you have spent $4000 on 8840 shares with a current value of $2210. Hardly successful but wait. Something happens and the outlook for MRNA improves. Maybe it is another promotion, maybe it is short covering, maybe an acquisition or drug approval but who cares. The stock price shoots over $1.50 and now you are sitting on a $13,000 pile of MRNA shares. Four thousand dollars becomes $13k in four years and all you had to do was make one purchase per year and have the patience that something good would eventually happen. Why would you ever own a mutual fund?
Disciplined money management can erase some of your mistakes and keep you in the game long enough to make some real money. All the research and analysis and computer algorithms are useless without sound money management. If you want to know how I tweak this strategy to create really outsized gains send me an email at [email protected] for a free, no obligation, no sales pitch pdf.
A few years ago I wondered how anyone could successfully speculate in the stock market before the age of computers, trading software, and algorithms. After all, speculation is as old as dirt and computers are relatively new. Then I came across rather simple quote, "Wealth is gained by the steady accumulation of an asset when its outlook is the bleakest." It took a few beers to digest this concept but it allowed me to come about with a rather crude way of creating a large amount of money from a really poorly performing stock.
Let's say five years ago you were duped into buying $5000 of shares of MRNA, a biotech stock, at $25 per share. You would have watched it steadily decline in price to its current price of $0.35 taking over 95% of your principal with it. Most people would have sold years ago or held onto it praying for a rebound. Or you could use that super basic strategy of dollar cost averaging to give yourself a fighting chance at making a profit.
If you could go back to that day when you first bought MRNA and only bought $1000 of shares and keep the rest in cash for the future you would have 40 shares. Then wait. On the anniversary the share price was $1.25 and you buy another $1000 worth or 800 shares. Repeat the next two years when it was steady at $0.25 and you could pick up another 8000 shares. Most advisors would tell you never to throw good money after bad stocks but this is speculation and it is almost required because you are "accumulating an asset when its outlook is the bleakest." Now you have spent $4000 on 8840 shares with a current value of $2210. Hardly successful but wait. Something happens and the outlook for MRNA improves. Maybe it is another promotion, maybe it is short covering, maybe an acquisition or drug approval but who cares. The stock price shoots over $1.50 and now you are sitting on a $13,000 pile of MRNA shares. Four thousand dollars becomes $13k in four years and all you had to do was make one purchase per year and have the patience that something good would eventually happen. Why would you ever own a mutual fund?
Disciplined money management can erase some of your mistakes and keep you in the game long enough to make some real money. All the research and analysis and computer algorithms are useless without sound money management. If you want to know how I tweak this strategy to create really outsized gains send me an email at [email protected] for a free, no obligation, no sales pitch pdf.