The stock market is constantly changing, and for investors who are new to the stock market, in order to make profits, they must master the following "eight secrets".
Tip 1: Buy large stocks at low prices and sell them at high prices
The so-called large stocks refer to the stocks issued by large companies with a share capital of over 1.2 billion yuan. The characteristic of this stock is that its earnings income mostly shows a steady but slow growth trend. Due to the need for strong funds to speculate on these stocks, most speculators do not easily intervene in the buying and selling of these stocks.
The technique for speculating on such large stocks is: 1. You can buy stocks in the low price circle during a downturn, and sell them when the performance improves significantly and the stock price rises sharply. At the same time, due to the large amount of funds required to speculate on this type of stock, there are relatively few major investors involved in the upward trend. Therefore, it is advisable to invest in the market during the economic boom period. 2. Large cap stocks have strong support and resistance at their highest and lowest prices in the past, therefore, their high prices in the past are an important reference for investors' real investments.
Tip 2: Small and medium-sized stocks need to seize favorable opportunities
The typical characteristic of small and medium-sized stocks is that they have less speculative funds compared to large stocks, making them more likely to attract major players to participate. As a result, their stock prices fluctuate greatly, and they are more susceptible to positive or negative news. They are also much more sensitive to changes in stock prices compared to large stocks, making them a common target of information wars between long and short major players.
The investment strategy for small and medium-sized stocks is to patiently wait for the stock price to come out of the trough, start to turn into an upward trend, and buy when the environment is expected to improve; The timing of its sale can be based on environmental factors and performance, allowing for profit taking near the high price circle in the past. Generally speaking, there are several cycles of ups and downs in small and medium-sized stocks within 1-2 years. As long as one can effectively grasp the market and use appropriate methods to invest in small and medium-sized stocks, the profits are usually considerable.
Tip 3: Growth Stocks Must Be Carefully Selected
Growth stocks refer to stocks issued by rapidly developing enterprises with a rate of return growth. The higher the growth rate, the greater the likelihood of the stock price rising. The techniques for speculating on growth stocks are:
1. To accurately select growth stocks suitable for investment among numerous stocks. One is to choose a growth oriented industry. 2. Choose stocks with smaller capital, as these companies have higher growth expectations. 3. Choose stocks with high growth rates in the past one or two years. The profit growth rate of growth stocks is much faster than most other stocks, usually more than 1.5 times that of other stocks.
2. Properly determine the timing of buying and selling. Due to the fact that the prices of growth stocks often fluctuate due to changes in the company's operating conditions, their gains are greater than those of other stocks. In the bear market stage, the price of growth stocks drops significantly. Therefore, it is advisable to purchase growth stocks during economic downturns and significant stock price declines, and sell them when the economy is prosperous and stock prices are expected to reach their peak. The technique for investing in growth stocks during a bull market is to invest in popular stocks in the first stage of the bull market, buy smaller growth stocks in the middle stage, and sell the stocks held when the stock market frenzy spreads. Due to the large decline in growth stocks during a bear market and the high stock price during a bull market, investing in growth stocks is generally more suitable for active investors.
Tip 4: It is advisable to choose stocks with both advantages and disadvantages for speculation
Speculative stocks refer to stocks that are easily manipulated by speculators, causing prices to skyrocket and plummet. Due to the volatility of these stocks, speculators can earn considerable profits in a short period of time. The speculation techniques for speculative stocks are:
1. Choose stocks with lower capital as the target for attack. Because stocks with relatively small capital can easily cause significant price changes once invested heavily, investors may obtain the buy sell price difference through such large fluctuations in stock prices. 2. Choose stocks with both advantages and disadvantages. Stocks with both advantages and disadvantages can easily skyrocket when their strengths are exaggerated; And when its weaknesses are widely spread, it can easily cause a sharp drop in stock prices. 3. Choose stocks issued by newly listed or new technology companies. These types of stocks often have high expectations and can easily lead to manipulation by both buyers and sellers, resulting in significant fluctuations in stock prices. 4. Choose stocks of companies that have undergone restructuring and reconstruction. Because when a company with poor performance undergoes restructuring, it is easy for speculators to intervene in the stock market to manipulate the company, resulting in significant changes in stock prices.
It should be pointed out that speculative stocks are easily manipulated by speculators to artificially cause stock prices to soar or plummet. Ordinary investors need to adopt a cautious attitude and not easily intervene. If they blindly follow the trend, they are easily trapped by high prices and become victims of large speculators.
Tip 5: Blue chip stocks are suitable for medium - to long-term operations
The characteristics of blue chip stocks are: relatively favorable and stable investment returns, with little fluctuation in stock prices.
The technique for speculating on blue chip stocks is: once you purchase blue chip stocks at a more suitable price, it is not advisable to frequently enter and exit the stock market, but rather to consider them as a good medium - to long-term investment target. Although holding blue chip stocks may not yield significant profits in the short term due to stock price differences, investing in such stocks as a target does not require worrying about the fluctuations of the stock market, regardless of market conditions. And once the opportunity arises, it can also yield significant profits. Long term investment in such stocks, even without considering changes in stock prices, can often yield considerable returns through dividends and rights issues alone.
For investors who lack stock investment methods and are willing to make long-term investments, investing in blue chip stocks is an ideal choice.
Tip 6: Three types of circulating stocks that cannot be bought
Circular stocks refer to stocks whose stock prices fluctuate significantly and have been hovering within a certain range. Due to the fact that the prices of circulating stocks often fluctuate within a certain range. Therefore, the corresponding buying and selling technique is to buy when the price drops and sell when the price rises. The key to implementing this technique is to effectively identify circulating stocks.
The general method for finding circulating stocks is to obtain a list of circulating stocks based on the company's financial statements or relevant credit information to understand the fluctuations in stock prices over the past 3 to 4 years. The list of circulating stocks can reflect the range and magnitude of stock price fluctuations, and investors can determine the buying and selling points of circulating stocks based on this. Usually, when buying and selling revolving stocks, the following three types of stocks should be avoided:
1. Stocks with relatively small fluctuations in stock prices. Because stocks with smaller volatility, even if they can be bought at the lowest price and sold at the highest price, after deducting the taxes and fees of stock trading, there is very little left, so they are not ideal investment targets. 2. Stocks with a long interval between stock price cycles. The longer the interval, the greater the cost of capital occupation, and it is advisable to limit the stock price cycle to within one year. 3. Stocks with low trading volume. Stocks with low trading volume often encounter situations where they cannot be bought or sold, so it is also advisable to avoid them as much as possible.
Tip 7: Trading Stocks Before Performance Changes
The so-called performance shock stocks refer to stocks that exhibit irregular and extreme changes in a company's operating performance due to the influence of economic conditions or other factors. The stock prices of stocks with sudden changes in performance tend to change in a positive direction with the company's operating performance. If the performance is good, the stock price will rise, and if the performance turns bad, the stock price will fall. Generally speaking, the prices of these types of stocks fluctuate greatly, and their rise and fall times are longer than other types of stocks.
The technique for speculating on stocks with sudden changes in performance is: 1. Buy them quickly after their rise is significant. Sometimes you can also seize the opportunity to grab short-term business and increase profits. 2. When the downward trend is clear, the stocks held should be sold out as soon as possible, and even the available securities should be short sold. When speculating on performance changing stocks, investors are required to closely monitor changes in the company's operating performance. If they can buy and sell such stocks before the company's performance changes, the investment effect will be more ideal.
Tip 8: It is advisable to buy stocks on the high side in the short term
The so-called overvalued holdings refer to stocks whose stock prices are significantly overvalued due to artificial speculation. The upward trend of such stocks sometimes deviates from common sense, making their stock price habits more elusive. Sometimes when the company is in a loss making state, the stock price is significantly higher due to the support of a future bullish situation or a hand battle between long and short positions that has evolved into a short squeeze. Even when the stock price is significantly high, there are still people with intentions who keep buying and selling, causing the stock price to continue to rise. Once the trader stops operating, the stock price will experience a significant decline.
The technique for speculating on overvalued stocks is: besides experienced experts familiar with insider information, it is best not to easily intervene in buying and selling due to the temptation of stock price surges. However, at the beginning of the stock price's consolidation and rise, small amounts of funds can still rush in for short-term gains. But if the main force withdraws from the stock market and the stock turns into a downturn, it is necessary to quickly and painfully sell the stocks held. Never expect a rebound before selling, in order to avoid being trapped by high prices and suffering greater economic losses.
