{"id":49448,"date":"2014-04-06T22:03:22","date_gmt":"2014-04-07T02:03:22","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=49448"},"modified":"2014-04-06T22:03:22","modified_gmt":"2014-04-07T02:03:22","slug":"why-you-should-be-investing-in-the-stock-market-and-backing-new-trends","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/04\/06\/why-you-should-be-investing-in-the-stock-market-and-backing-new-trends\/","title":{"rendered":"Why You Should be Investing in the Stock Market and Backing New Trends"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a><\/p>\n

At last week’s World War D<\/a> conference we tried to make a key point.<\/p>\n

We’re not sure if everyone got the message.<\/p>\n

Actually, based on the feedback we received, we’re certain that not everyone got the message.<\/p>\n

What was the message?<\/p>\n

It was an important message…perhaps the<\/u> most important message of the two-day conference. And now events are proving just how right we were to give that message…<\/p>\n

Most investors think that being a contrarian means doing the opposite to everyone else.<\/p>\n

It doesn’t.<\/p>\n

Being a contrarian means being the first, or among the first, to act on a trend. By doing so the contrarian investor<\/strong><\/a> aims to profit from the beginning of a trend that can reward the investor handsomely to begin with, and potentially make them a fortune in the long run.<\/p>\n

This is what we tried to explain at World War D. Only we’re not sure everyone got the message.<\/p>\n

\n

Bag the big gains on the Stock Market by striking early<\/strong><\/h2>\n<\/p>\n

Right now, most investors, whether they are mainstream investors or what we call ‘faux contrarians’, are more interested in trying to spot the next bust rather than looking for the next opportunity.<\/p>\n

That’s a shame. Although there’s a lot of glory in picking a bust, it’s nothing compared to the financial glory of picking a new boom.<\/p>\n

Here, let’s explain…<\/p>\n

Let’s say you back a stock in a new trend that’s about to take off.<\/a> And let’s say the stock is trading for 20 cents.<\/p>\n

It’s high risk. That’s why it’s only 20 cents. But you’ve spotted a new trend that few others have noticed. So you buy it. In this scenario it pays off. A few weeks or months later, the stock is trading for $1 on the stock market.<\/strong><\/a> You’ve bagged a 400% gain.<\/p>\n

Nice.<\/p>\n

At that point, other investors get in on the same idea. They buy at $1. A few months later, the stock is trading for $10. The punters who bought in at $1 are thrilled, and rightly so.<\/p>\n

Even though they didn’t get in early, they’ve still racked up an impressive 900% gain. That’s great by anyone’s standards. Well, almost anyone’s. But remember, you got in earlier. Instead of paying $1 per share, you only paid 20 cents per share.<\/p>\n

It doesn’t seem much of a difference, just 80 cents. But it is. It’s a big difference. If you had invested $1,000 at $1 per share, it would now be worth $10,000 at $10 per share.<\/p>\n

But by spotting the trend earlier and investing $1,000 at 20 cents per share, it has made an enormous difference to your returns. That’s because, with the shares now trading at $10, you’ve turned the $1,000 into $50,000<\/a>.<\/p>\n

That’s a 4,900% gain.<\/p>\n

You’ve made five times the return, just for having the guts and the foresight to recognise an opportunity that few others had considered.<\/p>\n

\n

Invest while others look elsewhere<\/strong><\/h2>\n<\/p>\n

That’s the truth of being a contrarian investor. If you spot the new trends early you have the opportunity to notch up outsized gains.<\/p>\n

But what about the risk?<\/p>\n

Sure, it can be riskier investing in the stock market<\/a> before a trend has gained momentum. But as we’ve shown you in the two examples, in both cases the maximum loss is $1,000.<\/p>\n

The biggest risk with backing new trends is that the trend may not occur. That could cause you to lose all the money you invest. Theoretically, if you invest in a stock<\/a> that has already started a trend then you should be on safer ground. But that’s not always true.<\/p>\n

A stock can begin to take off, but reverse course if things don’t play out. So the truth is that investing at any stage of a stock’s cycle is always risky. But if you want the potential for the biggest bang for your buck, then the best (and riskiest) time to invest is when few others can see the opportunity.<\/p>\n

That’s happening to one of the markets we’ve taken a keen interest in over the past few months…when most other investment pros have written off the sector.<\/p>\n

We’re talking about emerging markets<\/a>.<\/p>\n

Cheers,
\n Kris+<\/a><\/strong><\/p>\n

PS:<\/strong> I’m in San Diego and Los Angeles for the next three weeks. I’ll be reporting from the ground here so the commentary may have more of a US-tinged flavour. However, my team of analysts in Melbourne and London will also keep you posted on what’s happening in the Aussie market and the opportunities in the tech sector. I’m sure you’ll enjoy it.<\/p>\n

From the Port Phillip Publishing Library<\/em><\/strong> <\/p>\n

Special Report: Mining Boom Act II<\/a><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au At last week’s World War D conference we tried to make a key point. We’re not sure if everyone got the message. Actually, based on the feedback we received, we’re certain that not everyone got the message. What was the message? It was an important message…perhaps the most important message of the two-day … <\/p>\n

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