You don't have to take major risks to make a lot of money in the market.
Does that sound impossible? Not if you learn to minimize downside risk, spread it and limit it.
The way to minimize downside risk is to buy high VST-Vector "B" rated stocks with RS values above 1.00. These stocks are already going up in price and have well established track records of consistent, predictable growth. They do well in good times and bad. You can combine the safety of investing with the power of compound interest by buying high RS stocks with growth rates greater than the sum of current inflation and interest rates. This is the way to accumulate real wealth.
The way to spread risk is to diversify, diversify, diversify. Diversity in what you buy and when you buy. Buy at least 10 different stocks in 10 different industries. In this way, if something happens to one stock or one industry, your portfolio will not be mortally wounded.
The way to limit risk is to use Stop-Sell Prices. If your average Stop-Sell Price is 10% below the current market price of your stocks, your total portfolio risk is only 10%. Moreover, if you have at least 10 stocks in your portfolio, your risk of any single stock is only 1% of your portfolio. The best thing about using a Stop-Sell Price is that once it rises above your purchase price, you should never lose money on that stock. How many investments can you think of that have the upside potential of stocks with such limited risk exposure?
A. Buy High VST-Vector "B" Rated Stocks.
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Buy Stocks with the best combination of Relative Value, Relative Safety and Relative Timing.
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Favor high VST-Vector "B" rated stocks with RS values greater than 1.00.
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Favor stocks with growth rates greater than the sum of current inflation and interest rates.
B. Diversify in What and When You Buy.
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Do not put more than 10% of your funds into any single stock.
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Do not own more than two stocks in the same industry.
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Do not plunge into the market all at once. Spread your investments over time.
C. Use Stop-Sell Prices.
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A suggested Stop-Sell Price is given for every stock, every day.
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Once the Stop-Sell Price has gone above your purchase price, you should not lose money in that stock.
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Sell low VST-Vector,"S" rated stocks. (If the VST rating is above 1.00, you may consider "dollar averaging" the stock once the recommendation returns to at least an "H").
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Return to Step A.
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