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Many investors are struggling to make sense of current market conditions. That's normal… but not the goal. Making MONEY is.
It's important to remember that the markets do their thing based on mood, not necessarily logic. Understand the difference, and you can maximize profits while also minimizing risk.
Here's what you need to know…
- Look for companies making moves that give them staying power. These are going to be the companies going up when everything else is going down.
The key to maximizing profits and minimizing risk is looking beyond what a stock is doing. You've got to find out why it's valuable to make sure your positions are appropriately hedged. That means buying "must-have" companies that are making business moves that can help them hold or increase that value when their sector finally starts acting the way you expect.
- Change your tactics. Lots of investors think they have to pile in all at once. That's not true and, in markets like we've got right now, can actually be bad for your portfolio.
Both help you take advantage of the market's natural swings while also dramatically increasing your profit potential. At the same time, dollar-cost averaging – splitting your money up into chunks that are invested over time – forces discipline into your investing process while also making sure you have a long-term perspective – something a lot of investors are missing at the moment.
- Finally, manage your risk. People talk constantly in terms of how much risk an investment has or doesn't have, which is a mistake. Every investment has risk, but not all risks are worth the investment – which is why we constantly talk about the importance of specific risk management tactics like trailing stops and protective puts as a means of maximizing profitability AND minimizing risk.
To get Keith's latest recommendations as soon as they're published, check out his free Total Wealth newsletter. There Keith explores the keys to profiting in any situation – must-have companies in the six "Unstoppable Trends." Anyone keyed into these trends can beat the market – especially with Keith as your guide. Click here to get Total Wealth yourself.
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About the Author
Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean. In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.