Why Aren’t You Picking Better Stocks?
What a year so far. And it’s only half over. The total return for the market is already up 7.45%. With another 6 months to go, it’s on pace for a 15% gain, and maybe even more.
But why are so many investors underperforming the market? It almost defies logic. But it’s true.
Could it be that one of the reasons why so many people are not seeing the kinds of returns they want is because they don’t know of new stocks to get into? They find themselves in mediocre stocks because they don’t know of anything better instead?
I think that for some, their knowledge or ‘universe’ of familiar stocks is relatively small and this limits their opportunity of getting into better ones.
Which Half Are You In?
Did you know that over half of the stocks in the S&P 500 are underperforming the Index?
Even ‘good’ companies like MasterCard; they’re down -9.67%. Or Whirlpool, which is down -10.28%. Or even Amazon, down -13.19%. All while the market is setting record all-time highs. So what gives?
I don’t single these out so you can feel bad if you have them. But instead, to stop and think about ‘why’ you have them.
Nobody invests so they can underperform the market. But if you are — why? You don’t have to. If you’re underperforming the market, that means you have more of these types of laggards in your portfolio than leaders.
More . . .
The Greatest Single Investment Secret
No it’s not “Buy and Hold Forever” or “Buy Low. Sell High.” Instead, it rides the most powerful force impacting stock prices. For more than a quarter century, it has nearly tripled the market with an average gain of +26% per year. This has been verified by an independent accounting firm.
You can easily master it in your own home without a class or seminar. Arrange for this today and receive a hardbound copy of Finding #1 Stocks by Kevin Matras absolutely free.
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How the Other Half Lives
Of course, there are a lot of big names beating the S&P too. Take Marriott, or SanDisk, or Keurig Green Mountain for example. All are outperforming the S&P with gains of 33%, 47% and 61% respectively.
But now let’s move outside of the S&P.
Did you ever hear of a company called Synaptics? What if you did? It has outperformed the market by gaining over 70.59% since the start of the year. Or Greenbrier Companies? They’re up 98.23%. Or Vipshop Holdings? Up over 123.66%. (By the way, these are all Zacks #1 Rank stocks.)
There are hundreds and hundreds of stocks producing fantastic gains that many people may never have even heard of.
What about you? How many times have you heard about a stock or read about a stock that skyrocketed – only to think to yourself: “If only I knew about that stock ahead of time, I would have been in that”.
Expand Your Universe and Pick Better Stocks
Increasing your stock knowledge and awareness of new and better stocks is easier than you think. And you don’t have to re-invent the wheel.
For example, over the last 26 years, the Zacks #1 Rank stocks have beaten the S&P 500 in 23 of the last 26 years, with an average annual return of over 26.6% a year vs. the market’s 10.3%. That’s nearly 3 times the returns of the S&P with an 88% annual win ratio.
Stick with the top industries. Since roughly half of a stock’s price movement can be attributed to the group that it’s in, you’ll significantly increase your odds of success by focusing on the best groups. By how much? Our tests have shown that the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of 2 to 1. And the top 10% of industries outperform the most.
Great stocks often have great peers. See what characteristics the winningest stocks have. Do they have similar valuations? Are their earnings estimates going up? Has their stock rating been upgraded? This is called modeling. See what characteristics the best stocks have in common and then search for other stocks with similar characteristics.
Once you know what to look for, spending as little as an extra 5-10 minutes a day (or an extra 20-30 minutes a week) can transform your portfolio.
You don’t need to turn yourself into an analyst to beat the market. Just focus on what works, and apply those methods consistently.
For most of us, our investments are the largest, most important chunk of money we’ll ever be responsible for in our entire life.
And if it isn’t now, it likely will be one day.
The leaders in the past (stock names we’re all too familiar with) will likely not be the leaders in future.
But you can stay ahead of the pack by following some simple rules and methods that have proven to work.
And don’t be afraid to consider a stock you may never have heard of before. There was a time when some of the best stocks in your portfolio today, were brand new to you before you bought them. And now they’re one of your top performers.
The next time you read about or hear about a stock that’s skyrocketed in price; instead of thinking, “I could have been in that had I known about it” – wouldn’t it be great to say, “I’m in it!”
A Proven Method
There’s a simple way to get in early on such stocks. It’s called the Zacks Method for Trading: Home Study Course.
This is the easiest way to learn how to pick better stocks. And there are no classes or seminars to attend. You learn online interactively – in your own home, on your own time, at your own pace.
To start you off, as a free bonus, I will give you a copy of my hardcover bookFinding #1 Stocks absolutely free. Its 300 pages unfold virtually every insider secret I know. This special opportunity is only good until Sunday.
You’ll quickly see how to get the most out of the Zacks Rank system that has nearly tripled the market for more than a quarter century. Discover how to identify what kind of trader you are, how to find stocks with the highest probability of success, and how to trade them so you can consistently beat the market regardless of where stock prices are headed. The course also goes over some of our best-performing strategies from a variety of different trading styles, and it helps you create and test your own.
Friday had been the last day to get a free copy of Finding #1 Stocks a $ 49.95 value.But I am extending the deadline for readers of this article until Sunday, July 13.
Find out more about the Zacks Home Study Course >>
Thanks and good trading,
Zacks VP Kevin Matras is our chart patterns and stock screening expert. He developed many of Zacks’ most powerful market-beating strategies. He also directs the Zacks Method for Trading: Home Study Course.