Speculating is complicated, even for financial rocket scientists. What most of us want, or would certainly settle for, is simplicity, stability, and reasonable growth in our productive working capital.

A return to simple investing strategies with operating procedures that minimize risk and encourage understanding of the financial stock market needs to become part of our financial state of mind. By returning to simplicity we can find the success that lies at the heart of the stock market.

As bad as things have been since our economical downturn, investment models true to fundamental concepts, simple strategies, and disciplined operating rules have probably bettered the market numbers in at least six important ways. By looking at these results, we can find what is driving the investments we are trying to build.

First, higher lows during market downturns. Equity portfolios managed using basic principles of quality, diversification, income, and disciplined profit taking rules should not fall as much in market value as most mutual funds or poorly diversified portfolios.

Constant cash flow, even if not reinvested, places a floor under market values, and investors feel better when their values fall less than the market averages. In soundly managed programs, buying activity slows as prices rise, increasing “smart cash” for buying at lower levels later.

Next, disciplined profit taking automatically moves dollars from overheated sectors to cash or undervalued sectors during rising markets. This process creates capital that can be used to lower the average cost of remaining positions or to take advantage of new opportunities.

Following this, maintenance of planned income streams during times of financial crises. Most financial plans focus so strongly on growing market values that they lose touch with the need for planning a dependable retirement income.

They rely on selling equity fund units or inflated indicts for cash flow, instead of generating stable income with less exciting cash producing staples. Steadily increasing annual income can be placed on “cruise control” through the use of the Brand Levitra cost basis asset allocation methods contained in the Working Capital Model.

Next, there has been faster movement to new all time market value highs. When investors have a reasonable understanding of the various cycles impacting their investment portfolios, they develop valid expectations about the market value “performance” of their portfolios.

They are less likely to initiate knee-jerk or panic driven transactions, and more likely to take advantage of the new opportunities that lower security prices always create. Additionally, higher quality securities invariably are in the first group to regain popularity with investors as good news reports begin to dominate.

Next, there is steady growth in working capital in all market environments. Working capital is measured in terms of cost basis instead of market price.

As a result, all income generated from interest, dividends, and realized gains grow working capital regardless of the direction of market prices.

Last, there is annual growth in realized “base income” in standard portfolios. WCM portfolios are income machines by design.

No security is ever purchased if it does not produce regular dividend or interest payments. At least 30% of all base income should be reallocated to income-objective securities.

Similarly, every dollar of capital gains income, and net portfolio additions are allocated to income producers and the use of a cost based asset allocation formula insures annual income growth. Few financial professionals begin their careers with any encouragement to become comfortable with individual equity securities and the surprisingly large variety of individual, relatively uncomplicated, and generally safe income producers available for their clients.

Financial products are far more lucrative for their institutional employers and, as a result, the incentives for brokers and advisers to sell products are pretty much irresistible. Institutional propaganda, projections, predictions, and hype have the same affect on unsuspecting boatloads of speculators who most often become shipwrecked on the derivative rocks.

With these simple six tips on how to succeed in the stock market, you can protect the investments you have worked hard to start, and grow. Investing your money doesn’t have to be as risky as it seems.

If you follow rules, you can ensure that your money and the value of your stock will increase on a steady basis. Remember, when the market begins to take a dive, don’t give up-even hard times can bring their dividends.

Author Bio: Terry Daniels has worked in the stock market industry for the last 20 years. He recommends you choose your stock picks with care.

Contact Info:
Terry Daniels
TerryDaniels09@gmail.com
http://www.a1stockpicks.com

Category: Finance/Stock Market Investing/Mutual Funds
Keywords: stock picks