It’s important to choose a stock that’s consistent in terms of performance and market value, a stock that has good research behind it. In my experience, there are two types of swing funds: those that focus on stocks from large companies and those that are very much short on those companies.
In terms of the companies you are targeting, I think the two biggest categories here are financials and industrial stocks such as utilities, mining, oil companies, and technology stocks.
In terms of the companies you want to invest in, there are a couple of categories: those that will go up to $100,000 by 2012, or a small percentage of that cap. I would focus on this category of companies and focus on companies that have high expected future earnings but low risk, that will go up to $100,000 by 2012.
For some of these more speculative stocks, in this case, there will be a great chance of a large number of them going even wider than that.
And for companies that are going to be on the margin, this would likely be a category where you should focus on stocks going below $10,000 based on historical returns and the companies’ future potential earnings.
Lastly, as a rule, I would have the company do not exceed about $1 billion in market cap. A company with market cap approaching that size will have a long time to live and will have low volatility.
The last rule I’d like to discuss is that I do not recommend a large holding of a stock for swings. The reason is that, given my background, knowing the future earnings of the company should have enough impact, and the market’s movement over a long period of time is unpredictable.
If you want to get into the stocks I’ve singled out for you, there are a number of options. As always, you should only invest based on what the research supports and what’s good for you, not what I’d do because I am a fan of a stock from the past but I am not a fan of it now.
Remember, I’m not a traditional analyst. I believe in risk takers, who are willing to take on the risk of buying when others have already sold. So, if I get an idea that might be good for a long-term gain but isn’t right for me, I have no obligation to do anything with it. As a result, you can invest in any stock that I have identified for you today and keep taking profits until the
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