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With the first half of 2021 in the books (and recording one of the best 1st half performances ever with the S&P gaining more than 14%), the 2nd half could very well be even better, given the robust growth forecast. And since first-half gains of this magnitude typically lead to a continuation of gains in the second-half, there's a lot to be excited about. With the second-half now upon us, everyone should be thinking about how to take full advantage of it. So now is the perfect time to share with you one of the most powerful things I have ever read. It made me believe that anything was possible. And that whatever success I wanted to achieve I indeed could achieve it. It would not be without hard work. But the concept was simple. And I instantly knew it to be true. They called it a secret. In fact, it was literally called "the greatest secret in the world." And that secret was this: the key to success was that you only needed to be a small, measurable amount better than mediocrity to succeed. Is that really true? In its simplest form it is. The book went on to tell of why this was true. And in short, they described how most people give up on the meaningful things they hope to accomplish. Success Of course, I knew that true greatness would take a lot more than being just a few steps ahead of the pack. And that if you wanted to be the Michael Jordan of your profession, it would take a lifetime of dedication and being born with the right genes. But most people don't need to be the Michael Jordan of anything in their life to have life changing success. They only need to be a small, measurable amount better in the important things in their life. Want to pass that test that will get you that promotion? Stick to your study times and don't blow them off for some silly TV show and you'll be better prepared to pass that test. Want to lose weight? Have one less can of pop each day or one less sugary snack and watch how that can set in motion a metamorphosis. Want to make more money in the stock market? If all you did was have one less loser each month, and replace it with one more winner, that could transform your portfolio. You don't need to be as good as Warren Buffett to achieve your investment goals. By simply making a few changes in how you pick stocks, the extra results can quickly add up. But you have to know where to begin. Continued . . . | ||||
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| One Less Loser Setting a goal to have one less loser may not sound exciting, but the results can be dramatic. There are over 10,000 stocks out there. So be choosey. One of the best ways to put the odds of success in your favor is to focus on the top industries. Why? Because roughly 50% of a stock's price movement can be attributed to the group that it's in. That's why, oftentimes, even a mediocre stock in a top industry can outperform the strongest stock in a weak industry. In fact, in my testing I have found that the top 50% of Zacks Ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. If your last loser was in an underperforming industry, you were betting against the odds. Instead, stick with the best performing industries and put the odds of success in your favor. And when you do find yourself in a losing trade, get out sooner. Nobody likes to take a loss. But don't let your unwillingness to do so ruin your portfolio. Smaller losses are easy to overcome. But big losses, like -30%, -40%, and -50% losers can devastate your portfolio, not to mention your confidence. If you found yourself driving the wrong way on a one-way street, you wouldn't keep driving the wrong way or speed up, you'd turn around and get off. Same thing with stocks. If you bought a stock expecting it to go up, and it's now doing the exact opposite, get out before you crash your portfolio. One less loser, or even just deciding to take smaller losses, will immediately set you apart from the typical mediocre investor. One More Winner Now if you can replace that one less loser with one more winner, you'll compound your success even more. First, stick with the investing style that's right for you. There are many different investing styles out there. The four main fundamental styles are Momentum, Aggressive Growth, Value, and Growth and Income. You can also apply Technical Analysis to any of these styles, and others as well. But make sure you employ proven techniques to get the most out of each style. For example, if you're an Aggressive Growth investor; did you know that stocks with the highest growth rates perform almost as poorly as those with the lowest growth rates? It's true. This is because the companies with the highest growth rates are often unsustainable. And once those sky-high growth rates start to come down, even though they may still be spectacular, the price of the stock will fall back down to earth as well. Stick with companies with growth rates above the median for their industry. And they don't have to be in the triple-digits. In fact, being above the median, but less than 50%, has produced some of the best results. If you're a Value investor; do you know which valuation metrics produce the best results? Better yet, do you know what valuation ranges have the highest probability of success? In my testing, I have found that the Price to Sales ratio (P/S) is one of the best valuation metrics out there. And that stocks with a P/S ratio of less than 1, by far, produce the highest returns. Between 1-2 still produce stellar results. And between 2-3 outperform the market. But once you get over 4, there is a higher probability of losing on that stock than winning. That, of course, does not mean all stocks with a P/S ratio above 4 will go down. But if the odds of winning are greater below 1 (or at least below 3) and worse above 4, then by simply focusing on stocks in the optimum valuation range, you are now one step closer to having one more winner. Don't worry whether you've picked the best stock on the planet. In fact, the best stock on the planet today may not be the best stock on the planet tomorrow. But it doesn't matter. All you need to focus on are good stocks. Or just slightly better stocks than you're picking now to start seeing the kind of success you've always wanted. And one small better decision will set in motion other better decisions. And before you know it, you'll be achieving your goals. Stock Picking Secrets of the Pros Picking better stocks and making better decisions is a lot easier when there's a proven, profitable way to do it. For example, did you know that stocks with a Zacks Rank #1 Strong Buy have beaten the market in 26 of the last 32 years with an average annual return of 24.7% per year? That's nearly 2.5 x the S&P. But when doing this year after year, that can add up to a lot more than just two and a half times the returns. But you're not there yet, as that one item alone will only narrow down a field of 10,000 stocks to the top 220 or so. Way too many to trade at once. So the next step is to get that list down to a smaller, actionable list of stocks that you can buy. And one of the best ways to do that is to see what stocks the pros, who use these methods, are picking. Whether you're a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains. This applies to large-caps and small-caps, biotech and high-tech, ETF's, stocks under $10, stocks about to surprise, even options, and everything in between. Regardless of which one fits your personal style of trade, just be sure you're following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market. The best part about these strategies and stock picks is that all of the hard work is done for you. There's no guesswork involved. Just follow the experts and start confidently getting into better stocks on your very next trade. The Pros' Best Picks for Today Here's an easy way to find them: Download our just-released Ultimate Four Special Report. It highlights 4 stocks with strong fundamentals that are handpicked by our experts to have the biggest upsides for Q3. With consumers starting to spend and travel, an unprecedented level of pent-up demand is being unleashed. Experts predict historic economic growth and these 4 stocks are predicted to jump sooner and climb higher than others: Stock #1: One of the largest AI and Internet companies in the world, this strong cash generating business has exposure to exponentially growing markets where it has strong advantages. Stock #2: This leading beauty retailer in the United States is a Zacks Rank #1 (Strong Buy) poised to hit new all-time highs thanks to pent-up demand that comes with reopening and a new partnership. Stock #3: The backbone of innovation for global electronics, this enterprise gives investors a prudent way to invest in the semiconductor and electronics space going into the exploding 4th Industrial Revolution. Stock #4: The booming housing market gives this homebuilding pick the potential for the most upside amongst other companies in its industry on the back of strong order outlook and demand. I suggest you beat other investors to the punch and download this Special Report today. Opportunity ends Monday, July 5. See our Ultimate Four stocks now. » Thanks and good trading,
Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to download Zacks' newly released Ultimate Four Special Report before this weekend's deadline. | ||||
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| The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors and may represent the partial close of a position. This free resource is being sent by Zacks.com. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms of Service". https://www.zacks.com/terms_of_service Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through May 3, 2021. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance_disclosure for information about the performance numbers displayed above. Zacks Emails Zacks Investment Research |
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