{"id":55643,"date":"2014-08-08T02:50:53","date_gmt":"2014-08-08T06:50:53","guid":{"rendered":"http:\/\/countingpips.com\/?p=55643"},"modified":"2014-08-08T02:50:53","modified_gmt":"2014-08-08T06:50:53","slug":"what-to-do-if-you-want-to-make-bigger-stock-gains","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/08\/what-to-do-if-you-want-to-make-bigger-stock-gains\/","title":{"rendered":"What to Do if You Want to Make Bigger Stock Gains"},"content":{"rendered":"
August 8, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

Small-cap investing is hands down one of the most exciting and profitable ways to invest in any market.<\/em><\/p>\n

It always has been, and it always will be.<\/p>\n

The best thing is that unlike the blue-chip<\/a> end of the market, the scenery is always changing.<\/p>\n

That’s why a small-cap stock can go from sub-20 cent obscurity to three-dollar-plus fame in a matter of days. Here’s the proof…<\/p>\n

But before we show you the proof, we’ll note one thing.<\/p>

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As you’d expect, small-cap investing isn’t risk free. But that’s what makes it such a lucrative market for investors.<\/p>\n

The higher the risk, the higher the return.<\/p>\n

It doesn’t get much simpler than that.<\/p>\n

But providing you don’t go crazy by investing more than you should in these stocks, you often find the return outweighs the risks.<\/p>\n

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Quadruple digit gains in less than a year<\/strong><\/h2>\n<\/p>\n

The best example of the potentially lucrative nature of small-caps<\/strong><\/a> is a stock Tim Dohrmann told Australian Small-Cap Investigator<\/em> subscribers to take profits on this week.<\/p>\n

As of today’s price the stock is up 1,376% in a year.<\/p>\n

Almost as good is the fact that it’s up 1,076% over the past six months.<\/p>\n

Now, we can’t claim credit for all<\/em> of those gains.<\/p>\n

We recommended the stock two years ago when it was trading at 42.5 cents. Within a year of tipping it the price had sunk to just 12 cents.<\/p>\n

What a disaster.<\/p>\n

But we didn’t give up on it.<\/p>\n

There was a simple reason for that. And it’s the same reason why most investors are bailing out on stocks <\/a>today — they’re focussing on the short-term<\/u> issues while we’re looking at the long-term<\/u> opportunity.<\/p>\n

In the case of the company that has gone up 1,376% in a year, the market paid more attention to slumping commodity prices than it did for the potential of the US shale gas revolution.<\/p>\n

But when the company started to make a series of key announcements about a key project in Louisiana, the market started to take note.<\/p>\n

First the share price started to move up slowly…it climbed past the initial 42.5 cent buy price…until suddenly, within a few days the share price tripled. And a few weeks after that it had soared 711% above the recommended buy price.<\/p>\n

That’s when Tim sent out the email urging his readers to sell half of their position in the stock.<\/p>\n

If they could lock in a gain around $3.45 on half of their holding, the rest is pure cream if the stock can keep climbing higher. And if it falls? Well, they’ve still locked in a huge gain that’s many multiples of their initial investment.<\/p>\n

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You can’t get this in Aussie blue-chips<\/strong><\/h2>\n<\/p>\n

Do you see what we mean?<\/p>\n

You just can’t get that kind of gain from a well-known Aussie blue-chip stock<\/a> in such a short amount of time.<\/p>\n

The reason for that is simple.<\/p>\n

With blue-chip stocks the market generally knows everything there is to know about the company.<\/p>\n

It’s usually a mature business. There may be a dozen or more analysts covering the stock. They’re looking into every nook and cranny of the balance sheet.<\/p>\n

That makes it hard for investors to get in on a blue-chip stock at a cheap price — the market knows it all.<\/p>\n

That’s not true for small-cap stocks. Few if any analysts follow these companies. It’s just not worthwhile for a big broking firm to invest time and money in researching them.<\/p>\n

So a lot of these stories go completely unnoticed. That is, until something happens that no-one can ignore<\/em>. It’s at that point the whole market tries to buy into the stock at the same time.<\/p>\n

The result is the share price ratchets up until nothing can stop it, and it climbs 400%, 500%, or 700% or more in short order.<\/p>\n

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Even one jumbo return can make a difference<\/strong><\/h2>\n<\/p>\n

But what we’ve just shown you is one example.<\/p>\n

The Australian share market<\/a> is full of examples of stocks taking off in a hurry over the past few years.<\/p>\n

We’ve even managed to snag a few of these lightning fast opportunities for Australian Small-Cap Investigator<\/em> subscribers.<\/p>\n

Of course, we always wish that we had snagged more of them. But as any investor will tell you, you can’t get every one of them.<\/p>\n

And, you don’t have to. The reality is that if you can pick one or two of these multi-digit opportunities a year, those jumbo returns will sit quite nicely alongside the more modest high double-digit gains that you should get from most of the other stocks in your small-cap portfolio.<\/p>\n

That’s certainly how things are shaping up for Tim with his small-cap picks. He’s picked a nice spread of big gainers along with a few more modest double-digit gains.<\/p>\n

And, let’s be honest, as we said, small-cap investing<\/a> is risky. So Tim has a loser or two on the buy list. You’ll always get that when punting small-caps.<\/p>\n

But as Tim has explained this week, the key is to make sure you know when to cut the losers so they don’t drag down the performance of your whole portfolio.<\/p>\n

If you do that and take a punt on some of these great small-cap stories, it can lead to terrific rewards.<\/p>\n

Over to Tim now for last in his series on small-cap investing…<\/p>\n

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

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

The post What to Do if You Want to Make Bigger Stock Gains<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

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

By MoneyMorning.com.au Small-cap investing is hands down one of the most exciting and profitable ways to invest in any market. It always has been, and it always will be. The best thing is that unlike the blue-chip end of the market, the scenery is always changing. That’s why a small-cap stock can go from sub-20 […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-55643","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/55643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=55643"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/55643\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=55643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=55643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=55643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}