My Biggest Secret To Making Money With Stocks

I’ve been trading for more than 20 years, and I will share my biggest secret to making money with stocks. This technique is so simple I could teach a 10-year-old to do it, and they’d be making good money with stores in no time. Before I share my secret with you, though, I want to tell you how I finally figured this out.

In my twenties, I thought the best investment approach was to “play it safe.” Initially, I bought only “safe stocks” that had been recommended publicly by expert stock analysts. Mind you, I did my homework and spent a great deal of time reading and watching financial shows to determine which experts most highly recommended stocks. I thought this was a foolproof plan (it was better than going to a traditional broker, which I learned very early on was a big mistake). I also met a few well-intentioned older investors who tried to take me under their wing, but I kept seeing the stock market kick them where it hurts, too, so I can’t see I fully respected their advice. Over those early years of trying hard to make money with stocks, I averaged a significant gain but nothing spectacular and certainly not enough to keep me excited about investing in the stock market.

My Biggest Secret To Making Money With Stocks 1

By the time I hit my thirties, I had taught myself to analyze stocks. I learned much of this while sitting in the coffee shop of a bookstore with a very nice selection of financial books. I knew all about things like P/E ratios and how to do technical analysis. I was making a better profit than I did before. However, given the effort I put into it, I was still not making enough money for an hour to be excited about the results.

There were periods in my thirties when I lost interest in the stock market because I couldn’t make enough profit. However, I maintained at least a minimal portfolio and went through periods when I would trade much more actively. I’d happen to hear about a great stock, which would excite me, but my enthusiasm would eventually wear off when the profits from these overhyped stores became lackluster.

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I’ll also admit that the heyday of the tech bubble got me excited about stock trading more than once, as I love all things tech. I also had several geeky friends who understood which technologies would break open, and I tried to apply this special knowledge to the selection of stocks. I made some decent money doing this, and I was also lucky enough to get out of my NASDAQ tech stocks before everything crashed. I saw stocks trading for over $100 a share fall quickly into the penny stock range.

During most of my thirties, I was still thinking that buying well-known stocks on NASDAQ or NYSE was safer. However, those stocks’ prices were so high that it was difficult to accumulate many shares of anything unless you were willing to sink many thousands into the stock market. I was unready to do this because I had never seen enough profit to get me all that jazzed about doing so.

I also went through a period of IPO longing during the tech bubble. I kept hearing about these fortunate people who got in on an IPO, and then, as soon as the stock went public, they became instant millionaires overnight. A friend and I spent a great deal of time figuring out how we could get in on this IPO action; so much time, I’m numb, how much. It was all wasted time in the end (although I did enjoy collaborating with my friend) as we never did strike it rich with an IPO because we could never get in on one.

During my thirties, I occasionally heard about a cool tech start-up trading in the penny stock range OTC (bulletin boards) or on the pink sheets. I was hesitant to jump in, though, because I had always heard that trading penny stocks was too risky. However, I began noticing the incredible gains these little stocks made. I saw several make 1000%+ jumps. Eventually, I couldn’t resist them any longer and started to dabble in penny stocks.

My initial foray into trading penny stocks was fascinating, with mixed results. I had no idea what I was doing, but I would make an incredible profit percentage-wise that would send me on highs as I had never known before from trading occasionally. However, it was never that much money because I refused to invest more than a few hundred bucks. This was probably good because I also lost money on some penny stocks. Overall, I did make money. Overall, I made more profit from penny stocks than I ever had traded the “safer stocks.” I was also definitely learning and figuring out that if you want to make a lot of money in the stock market, especially in a short amount of time, trading penny stocks is the best way to go about it.