Stop Buying High and Selling Low!

Are you tired of constantly buying at market highs and being disappointing when the stock or index falls shortly after purchasing your favorite stock?

If you learn to recognize the patterns of the market and use the phases that money managers use to your advantage, you will have the upper-hand and produce colossal returns. Smart-money investors study, analyze and understand the four cycles that occur in every stock or index: Accumulation, Mark-Up, Distribution and Mark-Down.

Accumulation: This is the first phase when the market has bottomed (or very close to bottoming) and the value investors, smart-money and sophisticated traders start to accumulate stock at deep discounts. During this phase, the majority of investors are still bearish in the market and are sitting on cash, frightened by the negative outlook from the media and peers.

Mark-Up: During this phase, smart-money has already been accumulating, causing prices to rise (mark-up) and the market appears to be rebounding and stabilizing. This phase is when some retail investors (not many) start buying into the market, causing prices to inflate even more. At this point, the media starts discussing the possibility of the worse being over. During the end of the phase, more and more investors feel comfortable that the market is stabilizing and do not want to miss out on gains that their friends and co-workers are making from the recent rise in the market. At the end of the phase, everyone is now bullish and confident in the market, resulting in a strong uptrend.

Distribution: In this third phase, smart-money recognizes their nice gains they have realized since phase one (Accumulation) and start selling. This selling by smart-money pulls the market back and investors start experiencing mixed feelings (bearish and bullish). Once the selling outweighs the buying, investors start to get nervous with the market correction and high valuations. This causes the majority sentiment to change and investors who bought in during the Mark-Up phase start selling like wildfire. This typically results in a small profit, break-even or a small loss.

Mark-Down: Lastly, in the Mark-Down phase, sentiment is very bearish and it hurts to sell for those who bought at the top, but they sell off and realize significant losses. Many investors in this phase do not want to sell at this point because they think there is still a chance for a market re-bound, but it takes too long and they end up selling at a very low price. At the end of this phase, this is when smart-money gets excited because of all the discounts on stocks. and they start buying up as much stock as possible. This soon transitions into the Accumulation phase.

It’s not fun for investors who are constantly buying high and selling low, but learning to recognize market patterns can significantly improve your chances of outperforming the market. After all, the market is a game. It is a game of psychology, made up of those who are greedy, paralyzed by fear and those who know how to smell the fear in the market and act on others fear.

I’ll close with a quote by Warren Buffett:“Be fearful when others are greedy and greedy when others are fearful.”

buy low, sell high

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S&P Boasted 30% gains for 2013; Fundamentals should now be routine.

Written By: Matthew Boysel

As 2014 comes to a close, those who participated in the stock market since the beginning of the year have experienced exceptional returns in this bull market. It’s truly been an exciting year for investors to see the rise in equities – and most importantly in their portfolios.

With the economic outlook looking bright for 2014 according to numerous economists, we expect to see GDP increase, unemployment to fall, increase in consumer confidence and continued improvements in the housing market.

With the S&P 500 boasting 30% gains year-to-date, investors are now being limited in their search to find solid, undervalued stocks. Those who are staying in the market for 2014 should be on the look-out for a few things when searching for bargain buys (there still are a plethora of bargains). I’m going to discuss three of the most valuable fundamental factors everyone should look at on stocks they own currently or would like to own. This is basic fundamental analysis of a stock.

1. Take a look at stocks with lower P/E ratios (Preferably under 15). 

The P/E ratio (price-to-earnings) is a ratio of the price of the stock compared to the earnings per share. This number is a universal measure to show how much per dollar you’re paying per share for a companies’ earnings.

2.  Check-out the price-to-book ratio of a stock

Price to Book = Price per Share/Book Value of Equity. If the stock’s price-to-book ratio is less than three, as an investor, typically it results in one of two things: The stock is selling at a discount to its fair value; this may represent a perfect buying opportunity or something is fundamentally wrong with the company. Be careful when examining the price-to-book ratio and dig around into the balance sheet of the company.

3.  The PEG Ratio

Often overlooked by investors, this is a fundamental ratio you should look out for when looking to value a stock. This ratio is the price to earnings growth ratio, which is different from the P/E ratio because rather than looking at current price to earnings, it compares price to the companies’ historical growth rate. Essentially, the lower the PEG ratio, the better the deal you’re getting on the stock.

The three points above are just three simple tactics you can explore and keep in mind when re-balancing your portfolio for the new year. Personally, I use Google Finance for a lot of my stock analysis and it’s a great resource to find these fundamental indicators. Google even offers a advanced search for various criteria; It’s a great resource and you should put it to use this year! 

Happy Almost 2014 – Cheers!

year-to-date stock performance and 2014 forecast

 

*Year-To-Date Performance of S&P 500*

Generate More Revenue Painlessly and Quickly!

Statistics have proven, the most effective way for businesses to generate more revenue is by convincing existing customers to spend more money with you. It makes sense right? Your customer believes in you and has been loyal to you already, so as a business owner, you should be getting as much revenue from your existing customers as possible.

One of the best ways to entice your current customers to spend more with you is by creating a newsletter filled with your best deals, new products/services and current promotions. Generating a worthy newsletter filled with your current customers can be fast, efficient and provide a significant return on investment.

For many businesses owners who are trying to stay lean and keep costs minimal, I have good news! Signing up with Mail Chimp is free if you plan to send out less than 12,000 email and have less than 2,000 subscribers.

Okay, so what is Mail Chimp and why do I need to get started today? Well you might already have an idea from the above paragraphs, but Mail Chimp is an outstanding platform, that is super user-friendly and intuitive for tech-savvy, as well as non-tech savvy users to take advantage of.  Mail Chimp offers many rich tools, such as detailed analytic/reporting tools to monitor your campaigns, advanced social media features, super easy to implement design features (whether you want to use a template or custom HTML and CSS design), as well as API access.

To wrap things up, Mail Chimp offers businesses of any size free or affordable solutions to target existing customers and/or customers that you want to exist 🙂

My Business Needs a Website: Where Do I start?

Establishing your businesses’ presence on the internet is an intimidating process for many. Although it’s becoming easier to setup a simple website for your business, most people will get stuck, have questions and give up before hiring a Web Developer. I will help guide you through the web development phases and how you can get your business online today!

First, there are two ways you can go about building a site for your business: Doing it yourself or having someone develop one for you. For a business just getting on their feet, I recommend putting together a simple site through SquareSpace or Wix. These sites are user-friendly and will help you get online today by selecting a template, adding content and publishing that content.

For businesses who have it in their budget and value a professionally designed website, you should seek out to hiring a professional. A professional can incorporate the latest web technologies into your designs (mobile, responsive, etc), making your site user-friendly for potential customers. When hiring a Web Developer, you should look-out for a Developer who will build your site on a CMS (Content Management System), such as WordPress, so that if you want to update your content yourself once the site is complete, you will easily be able to do this. Having a site developed on a CMS is the platform many companies develop extra tools to enhance your site on (open-source), as well as it makes it simpler to perform SEO.

Some simple industry terms you should know when designing your own site or having a professional develop your site are listed below:

Domain Name: This is the website address. This is where your customers will find you by typing in businessname.com. You have many options for extensions with your domain name (.com, .net, .org, .biz, etc). Domain names should run around $10 per year, but you can often search for deals through web hosting companies like GoDaddy.com.

Web Hosting: You need web hosting in order for your site to appear on the internet when a user types in your domain name. Look out for reputable hosting companies. Prices range from as little as $3 per month – just depends on how much content you need and how many visitors you plan to have on your site.

SEO: Search Engine Optimization is a set of tactics used to increase the visibility of your website on search engines, such as Google and Bing organically (without paid advertisements).

Hiring a SEO Expert

The buzz word every small business owner hears about these days is SEO. So what is SEO and why should I even care? Simply put, SEO stands for Search Engine Optimization; A set of tactics used to increase the visibility of your website on search engines, such as Google and Bing organically (without paid advertisements). The reason it is important is also simple; Your business needs to participate in SEO tactics if you wish to be found on the internet organically.

Clearly, there is an abundance of SEO “experts” just by doing a quick Google search. Let me tell you though, there is a significant variance in terms of skills for SEO “experts”. There are definitely SEO experts out there who know their stuff, but in this industry, there is a high percentage of “experts” that can’t even tell you what a meta tag is. The point is, you need to be very selective when hiring a SEO “expert”.

I’m going to walk you through a few key components a small business owner should look out for when hiring a SEO Expert:

  1. First and foremost, your expert should provide you with a list of references they have provided SEO work for. You should get in contact these references and check their results and opinions based on their rankings before and current rankings across the internet.
  2. With so many scammers in the industry, I believe you should look for results-driven fees. There are agencies that will do this (typically with a start-up fee) and you pay them when your rankings on search engines increase! Why have it any other way? *Make sure to put together a contract*
  3. Do your research before you meet with them: Going into a meeting with a SEO expert can be intimidating since most business owners are not familiar with how SEO really works. Grab a book from your local bookstore, read some articles (like my blog). After you feel confident with the industry terms, you will have an edge up over most clients.
  4. Beware of those “experts” who are charging less than $500 a month for their services and promise to deliver results. Often times, these “experts” will take your money and do a little dance and than submit your site to thousands of sites, not adding any real value and possibly getting you blacklisted from search engines.
  5. Before you hire a SEO expert, make sure to check your current rankings with search engines by using the Google Keyword Planner. This is a very important step, many small businesses fail to do before hiring an expert.
  6. Find out what kind of reports they will provide you. If you’re paying money for your expert, you should be receiving updated reports on your site at least monthly, as well as a quick phone call.
  7. Ultimately, the person you hire should be motivated, enthusiastic, be able to explain any industry concepts clearly and concisely, as well as honest.