How to Double Your Stock Returns in 2018
After a fantastic 2017, and a spectacular January 2018, the market finally made its long overdue correction. But that two-week correction has since been cut in half, with the market now just 4.90% below its all-time high made on January 26th.
Given two years of near effortless gains and record low volatility, a round of profit taking was definitely in order, and a market-refreshing pullback was bound to be seen. Although the lows of that correction have, quite possibly, already been seen.
After successfully testing trendline support on Friday, 2/9/18 (not to mention the 200-day moving average), the market has raced higher, with investors picking up stocks at prices not seen since late last year.
With a robust economy, historical tax cuts, and surging corporate profits, the market has never looked better.
So as an investor, you should be crushing the market right now. And last year too. If not, now would be a good time to reflect on what you're doing right in the market, what you're doing wrong, and what you'd like to do better in this new year.
This includes patting yourself on the back for your successes.
Being honest with yourself for your failures.
And setting big goals for what you'd like to accomplish.
Like doubling your investment returns. (That's right, double!)
It takes no more mental energy to work on a big goal than it does to work on a small one.
But the end results can be enormous.
Most people set their sights on small ideas because they don't yet know how they'll achieve them.
But in today's day and age, somebody has likely accomplished the very thing you've set out to do -- and left a roadmap on how to do it.
And for those who may think the market has already made its move and it's too late, think again.
Continued . . .
The deadline to start a free 7-day "test drive" of all Zacks private portfolio services is midnight Sunday, February 18. You can still access all our real-time buys, sells and market insights.
No cost. No credit card. No commitment whatsoever.
This is the best way to sample the power of Zacks portfolios from short-term "black box" trades to long-term home run plays, from large-cap stocks to value investments and more. Many beat last year's surging bull market -- up to 2.3X over. But remember, you must get started no later than Sunday.
The market has been trading within a perfectly defined uptrend since Q1 of 2009, and shows no sign of slowing, even with the recent correction.
And with GDP more than doubling, earnings estimates soaring, and consumer confidence at a 17-year high, the stage is set for another banner year in 2018. And with the bullish backdrop in place, that means significantly larger upside potential in individual stocks where you could see gains of 25%, 50%, even 100% or more, if you know where to look.
Do What Works
So which stocks should move the most? Stick with tried and true methods that work to find the best ones.
This is part of the roadmap to success.
For example, did you know that stocks with a Zacks Rank #1 Strong Buy have beaten the market in 24 of the last 29 years with an average annual return of 25%? That's more than two times the S&P. But when doing this year after year, that can add up to a lot more than just two times the returns.
And did you also know that stocks in the top 50% of Zacks Ranked Industries outperforms those in the bottom 50% by a factor of 2 to 1? There's a reason why they say that half of a stock's price movement can be attributed to the group that it's in. Because it's true!
Those two things will give any investor a huge probability of success and put you well on your way to achieving your goals.
But you're not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 100 or so. Way too many to trade at once.
So the next step is to get that list down to the best 5-10 stocks that you can buy.
Proven Profitable Strategies
Picking the best stocks is a lot easier when there's a proven, profitable method to do it.
And by concentrating on what has proven to work in the past, you'll have a better idea as to what your probability of success will be now and in the future.
For example, if your strategy did nothing but lose money year after year, trade after trade, over and over again, there's no way you'd want to use that strategy to pick stocks with. Why? Because it's proven to pick bad stocks.
On the other hand, if your strategy did great year after year, trade after trade, over and over again, you'd of course want to use that strategy to pick stocks with. Why? Because it's proven to pick winning stocks.
Of course, this won't preclude you from ever having another losing trade. But if your stock picking strategy picks winners more often than losers, you can feel confident that your next trade will have a high probability of success.
Stock Picking Secrets of the Pros
One of the best ways to begin doubling your returns is to see what the pros are doing.
There's no one perfect way to beat the market. Some traders prefer high flying growth stocks, while others prefer deeply discounted value stocks. Some may prefer fast-paced momentum stocks, whereas others are more comfortable with mature, dividend producing income stocks.
Yet others may want to focus on more specialized strategies like insider trading (the legal kind), institutional buying and selling, large-caps, small-caps, stocks about to surprise, or cheap stocks under $10.
Still others may want to turn their attention to specific sectors or industries like healthcare innovators, biotech stocks, or high-tech companies.
Or even incorporate options into their portfolio.
Regardless of which one fits your personal style of trade, just be sure you're getting the best advice from experts who have demonstrated their ability to beat the market.
I'm happy to say, our team of experts performed spectacularly last year, with many of our most popular strategies beating the market, including our Large-Cap Trader service, which was up 50.1%, my very own Options Trader service, which was up 46.3%, and our Black Box Trader service, which was up 37.9%, just to name a few. And we are off to a great start this year!
The best part about these strategies (aside from the returns) is that all of the hard work is done for you. There's no guesswork involved. Just follow the experts and start trading like a pro.
Roadmap to Success
As you can see, there's a clear roadmap to success to help you achieve your goal of doubling your stock returns in 2018.
No need to reinvent the wheel. The path has already been created. Now it's just about doing it. And once you decide to do something, it's amazing how often those decisions come true.
And just like anything, it only requires a few simple steps to get the ball rolling.
Where to Start
Step One is identifying which strategy is right for you.
A great way to do that is to look inside all our private portfolios through the unique arrangement we call Zacks Ultimate.
For the next 7 days, I invite you to see how all these different Zacks strategies perform in real time. This experience is completely free. No credit card needed. And there's no obligation to subscribe to anything.
Why am I offering this? Because there's simply no better way to show you the power of the Zacks Rank, and to let you decide which of our winning strategies is right for you.
To sum up, you get full access to all of our portfolios, many of which beat last year's rampaging bull market -- by up to 2.3X over:
• Growth stocks that power higher
• Value stocks as they start to climb upward
• Large-cap stocks that are ironically often little-known
• Momentum stocks with solid uptrends
• Income stocks with the best payouts and long-term outlooks
• Earnings surprise stocks before they report earnings
• Our best stocks under $10 with big upside potential
• Selected insider trades (the legal kind)
• Our special Technology Innovators portfolio
• My own options trading service
• And more
Don't miss this unique 7-day test-drive. Deadline to take advantage is midnight Sunday, February 18.
Thanks and good trading,
Kevin Matras serves as Executive Vice President of Zacks.com and all of its leading products for individual investors. He is also the Editor of his personal portfolio service, Options Trader.