Archive for December 2010

Not Another “HOT Stock” Newsletter

People have been emailing me to inquire about the new Investinthemarkets.com Weekly Newsletter… and so I thought I’d take a few moments to answer some of your questions.

First, this newsletter is not about “hot stocks” or “triple-digit returns.”  It’s not designed to be an advisory tool as such.  After all, I’m not a financial advisor… I’m a weekend investor who has found success in doing a few things well.  I’ve discovered, as many of you likely have, that to be an active, daily trader requires hours of time I just don’t have.  And those “hot stock” type of newsletters often are mere guesses & what is “hot” one day is freezing the next.

Instead, this newsletter will share with you what I’m doing… what I’m thinking… and the stocks I’m considering buying as well as the entry and exit points.  I’m basing my decisions on two primary factors:

1. Fundamentally Strong Stocks – The majority of the stocks I invest in have solid financial qualifications.  But without getting caught up in all the numbers, I focus on a few key figures including the debt level of the company (it’s debt that caused so many difficulties for companies in 2008), revenue (strong companies increase their revenue), and growth.
2. Technically Strong Stocks – Using weekly technical charts, I look for companies with upward momentum.  I don’t try to guess the bottom or tops… I just go with the flow.  I believe the trend truly is an investor’s temporary friend.

Using Weekly Technical Charts

Weekly technical charts take away so much of the volatility investors experience when investing in the stock market.  Daily charts can fluctuate throughout the day, going from significant gains to notable losses.  These shifts in a stock’s value can cause the most experienced investor to feel queasy.

Weekly technical charts are to daily charts as a cruise ship is to a dingy on the ocean… the weekly charts tend to stabilize the volatility and allow investors to ride out fluctuations without being tossed around by the daily ups and downs.  The weekend investor is best served, in my opinion, by the weekly charts.

Here’s a couple of the ways I use weekly charts to help me determine a stock’s momentum:

1. Volume – If you’re looking for a technical indicator, be sure not to look past volume.  It is the only leading indicator available to the investor.  All other technical indicators lag… they tell you what happened.  Volume, on the other hand, is a leading indicator… in real-time… it tells you what is happening.
2. Timing – There’s no rush… to buy or sell.  Weekly technical charts enable me to reduce the amount of emotion that goes into deciding to buy or sell a given stock… I let the charts determine the right time.

So, if you’re looking for a helpful tool that focuses on Canadian stocks (not to the exclusion of US stocks), from the perspective of a Weekend Investor, why not give it a try! It’s not another hot stock newsletter.