7 Weird Secrets to Investing in Stocks That Wallstreet Doesn’t Want You to Know

Did you know if you invested $1,000 in Amazon stocks 11 years go it would be worth more than $19,000?

It’s no wonder that people want to invest in stocks because it can equal large profits.

Playing the stock market can often be a gamble. Unless of course, you have some weird secret tips you use to win.

Keep reading to learn 7 secrets to investing in stocks.

7 Weird Secrets to Investing in Stocks That Wallstreet Won’t Tell You

If you’re thinking about investing in stocks to achieve financial security in the future it’s smart to put in some time into research. There are people who skip doing research and gamble in the stock market.

Looking at the stock market as a game rather than a gamble will help you be successful in the long run.

The following secrets to investing in stocks can change your life!

1. Be Willing to Own Your Stock for 10 Years

Once you do your homework and decide on a stock ask yourself if you are willing to own this stock for ten years. If you’re not comfortable owning that stock for ten years, then don’t own it even for ten minutes. The reason is you want to think long term vs short term.

Profits in the stock market come from being right in the stock market not from taking action. It’s smart to not get infatuated with the market hype to make quick money because this can equal making quick losses too. 

2. How Is Management Using Its Resources?

This will require a bit of research but well worth looking at how management is using its resources like money and manpower. Their efficiency will reflect in Return of Equity and Return on Capital. 

Different types of resources can include any of the following:

• Human resources
• Physical resources
• Financial resources

No matter what resources they have they all need to be used efficiently to ensure they continue delivering consistent profits. If a company is wasting or not using their resources that is a warning signal.

3. Calculate How Much Money You Will Make

This weird secret will require you to make some assumptions but you want to calculate. A tip to calculating take into account the expected dividend and expected share price appreciation. The share price appreciation can be estimated by taking into account the change in P/E ration and Earning per share.

Return on Equity = Net Income

Take a look at stock quotes to help you determine what numbers buyers and sellers are currently agreeing on to add to your research. This tip to help you look before you take a leap into the stock market. Calculate the return on investment before investing.

4. Don’t Just Look at the Stocks

Take a look at the company behind the stock. Act like you’re buying the entire company when making your decision.

If you were to buy a sticks and bricks business you would analyze the entire store. You would more than likely analyze some of the following:

• Overall sales
• Sales consistency
• Store competition
• Products sold
• How the store will manage change in customer trends

A similar logic applies to choose your stock. If you had enough money would you buy the entire company?

When analyzing the business don’t look at their short term returns during bull markets. During bull market runs even an average business will make money.

Analyze the company’s long term track record to help you choose the right company to invest in their stocks.

5. Stay Away from The Hot Stocks

There are always stocks that have extra attention and showing a huge return on investment because they are all over the media and people are talking about them.

You will want to stay away from these stocks! The time to invest in a stock is when others aren’t into them. 

Instead of choosing a hot stock that’s performing great right now because everyone is talking about it choose a stock that has a track record of performing well over a period of time. Hot stocks can quickly come to a halt when the media stops talking about it. 

The stocks that are not hot (that you want to invest in) can be compared to plants. They have the following things in common:

• Slow growth
• Not interesting to watch it grow
• Need the patience to see it grow
• The end result is rewarding
• No quick tricks to have faster results

Bottom line: don’t fall prey to what’s popular.

6. Invest Sooner Rather Than Later

The sooner you invest the less you need to invest every year to reach your savings goal.

With a hypothetical 6% annual return if you’re 25 years old you only need to invest $500 per month to have $1 million when you’re 65. If you wait until you’re 35 then you need almost $1,000 per month vs $500 for the same amount of money when you’re 65.

The reason for the difference is the compound interest which means earning interest on interest. The earlier you start investing the harder your money will work for you.

7. Get Rid of the Weeds

This secret is basically to get rid of the losing stocks and keep your winning stocks.

Don’t get emotionally attached to the stocks you invest in. This will make it difficult to get rid of them when they are no longer maintaining the fundamentals that were there when you made your pick.

It’s ok to consider selling a stock if something in your original research has changed such as how the management is using its resources. Over time there might be new management or changes that make the stock you chose not as rewarding.

Ready to Invest like a Rockstar?

The seven secrets to investing listed above will be your roadmap to choosing where to put your money. Having a clear route will make it easier and guide you as the market fluctuates. Now it’s time to get started.

For more weird tips and tricks check out our blog.

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