Part III Of How One Can Earn Semi Passive Proceeds Through The Stock Market PDF Print E-mail
Written by Bernard J Dreyfus   
Sunday, 14 November 2010 21:44
Important!: Before you look at this informative article, do make sure you've figured out the previous two parts on this 3 part series in order that what exactly is pointed out inside the rest of the article on stock market movement makes sense.
by BernardJDreyfus


Imperative!: Prior to going through this post, please make sure you have gone through the earlier two segments on this three part series so as what is mentioned for the remainder of the editorial on stock market timing makes sense.

A great way of boosting proceeds from the pure dividend plan is to watch the stock market then to get in when the war is looking good and to depart when all seems lost. In that way, you are able to bring down risk and improve benefits by quite a bit.

The rules of the game is this:

The 1st step is usually to screen for stocks which are right for dividend investment. They tend to be reputable and also have a tendency of showing formidable performance when it comes to returns and profits. Choose only the very best stocks by way of dividend history (ideally, they seldom reduced dividends earlier) and price movement (the stock market has made the shareholders happy for the stock's brilliant earnings results over the years). Four of five is more than adequate.

Next is to spend time waiting for an uptrend in the stock market (with respect on the total of accumulation days on a triweekly foundation or so, see post on semi passive income from dividend stocks) after a recent down stock market to time your stock transactions. It is important that you do not buy directly but to initiate a 50% initial buy, followed by two more 25% buys at small percentage points above your primary purchase price. If that does not happen and the stock price plummets instead, sell every single one your shares at once once it falls below 7% of your original buying price as you can always buy them back in a while when it will be not so risky.

This is done so as to cut down the probability of losing money and we will not suffer significant losses if it turns out that the uptrend is not successful. More often than not, if an uptrend is fated to be unsuccessful, it will achieve this in its infant stages through several distribution days. Buys in stages will guarantee that the uptrend is brilliant enough before investing in new shares.

Next is to watch your holdings (as described in part II of the article series) two times a week as stated in part II. At this phase, if the uptrend has resumed you will notice that the price of your holdings are rising as over time, the corporations that are exceling will jack up their dividends also, as a consequence boosting your profits even further. At this time, you should not put your profits back into the stock market but ought to save them instead and ensure they are liquid and you can employ them anytime.

The next step will be activated if the stock market turns bearish in the appearance of distribution days and will depend on your personal favorite.The first technique is to exit the stock market and sell all your holdings to re-invest them for a second time through step one as mentioned formerly with your accumulated financial savings when the uptrend begins again. This will make sure you defend the capital gains from the increase in the prices of the holdings that you have possession of. Nevertheless, this step needs more toil.

The next approach is to select to re-invest your financial savings from your profits into the stock market by way of step one without selling your intial shares. It means that you have to endure all bear markets and invest strongly only when you detect that the uptrend has started all over again. The gain of this is that you engage in a lesser amount of work to carry out and do not have to lose sleep about timing the stock market. Nevertheless, do be prepared that there is a larger risk involved as the holdings of the company you have bought might not recover.

This is not a investing tactic that ensures success and is a competency that calls for time to be overcome, especially having the right stock picks. Nevertheless, with great effort and the skill to be able to reflect from one's blunders, one can undoubtedly do well in the stock market in the future years.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Bernard J Dreyfus started out as a stock market beginner but has evolved through years of blood and sweat to become an experienced and smart stock investor who makes profits often. He hopes to educate others about the stock market and how to profit from it. Unique version for reprint here: Part III Of How One Can Earn Semi Passive Proceeds Through The Stock Market.