Six reasons why we love trend investing
Submitted by Van Beek on November 17, 2009 - 16:28
Are you aware of all the advantages that trend investing offers to people like you and me? We have money to invest. But we do not have (or do not want to spend) a lot of time on studying boring quarterly financial reports.
We also know that you can loose a lot of money when you just buy and keep mutual funds. But what is the alternative?
In this article, we will share why we love trend investing. In summary, it is because of the following. Trend investing offers all of us the opportunity to capitalize on stock market trends and to start or continue our journey to financial independence without having to spend a lot of time on it. Let’s go into the different reason behind this.
1) Trend investing offers much better returns than just buy and hold.
In another article on this site we explained that an investment of 10,000 dollar in a Dow Jones index fund would have grown to 72,000 dollar over 20 years when using the trend investing system from this site, while just buying and keeping the fund would have grown to only half of that.
Trend investing thus provides much better returns than just buying a fund and keeping it till you want to use the cash for something else.
2) Trend investing allows you to keep using your existing bank or broker
Most of us have a broker or bank that we trust. They hold our savings and current account. They manage the buying, selling and holding of shares and funds for us.
For trend investing, you do not need to go to a special institute or broker and hand them your money. You can do this via the bank or broker that you are using already, provided that they allow you to buy, sell and hold mutual funds and ETF’s for minimal fees. If you do not have a broker yet, we can always recommend a reputable one.
3) Trend Investing allows you full control and overview
When owning individual stocks, to diversify your risk over different sectors and continents, you need to buy dozens and dozens of different stocks. To keep track of all of them is a full time job. Trend investing, or in any case the system of Stock Trend Investing, is based on investments in mutual funds and exchange traded index funds.
With five to ten funds or so you are sufficiently diversified. And since the system is based on the trends in the major stock market indices, you do not need to consider individual stock fluctuations. The monitoring of a handful of funds and a handful of indices is easy to do and provides you with a direct overview and control over your investments.
4) Trend investing is safe from scamming or tricking
With trend investing, all your money can stay under your own control via your own trusted bank or broker. You do not need to transfer any large sums to foreign bank accounts. You do not need to transfer money to any people or organizations that you are not familiar with. It is safe and can be done without being subject to the risk of scamming and tricking.
5) Trend investing saves your time
Trend investing is an easy, straightforward method to beat the market, especially when you look at a period of a number of years or longer. But the good thing is that it does not require a lot of time.
There might be complex methodologies available that could yield you a higher return than trend investing. However, these complex systems require that you handover control and overview to someone else or they require the time and effort from you to become the expert in all its details. I do not have or want to spend that time and neither do you I think.
6) Trend investing makes you welcome the downturns
With trend investing and timely signals from a proven trend investing system, you sell most of your fund holdings in the period that the upward trend changes into the downward trend. This means that during the downtrend you are liquid with cash that is safely stored in your savings accounts and that you can use in a very limited way to benefit from the downturn with shorts and put options.
But in any case, you feel good when stocks are going down. You made your money on the way up and you pocketed your profit. And you know that what goes down shall one day go up again. When the trend changes again from down to up, you will have ample cash available to start a new ride. Downturns are just becoming the prologue for another great period of rising indices and gains in your portfolio.
So, that are the six reasons we love trend investing.
What other key advantages of trend investing do you see? Please share your thoughts and comment on this article.
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