Find Your Style
Now that my NCAA bracket is pretty much busted and baseball season doesn't start for two more weeks, I might as well as focus on the stock market. I want to continue my previous discussion of trading and investing approaches and time frames because choosing an approach that fits your personality and goals is critical. So is selecting the right securities. Defining these up front can help increase your odds of success in the markets.
As we move out in our time frame into the six- to 12-month segment of the markets, we need to change our approach somewhat. In this time frame, momentum is still very important, but valuation becomes more of a factor. The problem with super-high momentum stocks is that when the mo-mo stops, it gets ugly fast for stocks with high valuation multiples. If I am looking at a longer holding period, I want to consider adding value to my momentum approach. I am still surfing, but I'm surfing using stocks with solid fundamentals and lower valuations that are less likely to collapse if the market stumbles along the way. I want to look for value stocks that have started to improve and the market is noticing, or growth stocks with lower price-to-earnings-to-growth ratios that have not risen to unstable heights....567 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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