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Stock Picking Tips -- Six Months in Advance

Consider for a moment what the greatest investor in history has averaged for decades. Warren Buffet has averaged around 20%. This 20% has made him the greatest of all time. A fund manager, Peter Lynch, has also averaged a number around 20%. About 75% of all fund managers can not beat the market which can be tied by simply buying into an index fund. A superstar fund manager with many researchers on the payroll is considered a genius if they can beat the market by any amount.

With this in mind, what can an average investor do to beat these superstars? Find and use better research. I have found the newspaper Investors Business Daily (IBD) to be a supreme research tool for stock investing. In the last ten years I have learned a great deal from IBD and from William O’Neil’s books. He uses rules for investing and lists them in his paper. These rules should be the basis of investing for anyone interested in making a large sum of money in the stock market. The charts in IBD are full of details I have never seen on other charts and should be used before a stock purchase is made. He has a top 100 list of stocks based on a number of fundamental and technical factors that change as the market changes. I use this list to form a watch list of stocks that I can look at quickly and see if the stock is in a buying position.

Up to date information about relative strength, earnings, institutional buying or selling, and insider trades is highly valued by traders and investors alike and IBD has all this and much more. They also have a website version available.

The one thing that really lets you use the paper to its greatest advantage is planning out six months in advance what will be the hot investment item, be it a stock, commodity or option. By planning out six months ahead of time you can find investments for a bargain price that have not been discovered by the general public yet will appreciate greatly when they finally are. You need to think in more of a macro point of view rather than in the more common micro view. The micro view is important and that is the beauty of IBD. The paper does all the micro work for you. They have given you the information about great stocks that are about to take off. You only need to see what the economic and business environment will be in about six months time. If this is done right your future will be very bright.

With three startup businesses before he was 21 years old, Matt Fox has the experience to help you create your own businesses for your financial future. See his blog at http://www.bizmaker.blogspot.com

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