- Investment strategies
- Why invest in the stock market?
- Buy and hold or technical analysis? Why you need an investment plan
- Value investing and short selling in volatile markets
- Using technical analysis to support value investing
- Investing in the unexpected
- Franking credits, explained
- What is dividend stripping and is it a sensible strategy?
- Investing in quality IPOs
- How to invest in stocks that benefit from a moving Australian dollar
- Reasons to avoid bonds when interest rates are low
- How value investors use Skaffold
- Quality, growth and value = a winning strategy
- Know your investor type and boost your performance
- Technical + fundamental analysis = better buy and sell decisions
- Fundamental investing
- Value investing and the price earnings ratio
- Intrinsic valuation models and methodology
- Value investments or value traps?
- How to find value stocks in a bull market
- Find value investments in expanding markets
- Why capital raisings struggle to add investment value
- How to value an insurance company
- Top stocks
- 5 qualities of top stocks
- How to find stocks with a competitive advantage
- Why return on equity is the best measure of business performance
- Using cash flow to find value investments
- Finding high quality dividend stocks
- Debt is not always a dirty word
- Why Skaffold share investment software makes sense
- Using economic factors to uncover the best investment options
- How do experts find top stocks to invest in?
- Investing in global stocks
- How to invest in international shares on global stock markets
- Benefits of investing in international shares
Investing in the unexpected
How do professional investors make money in the stock market?
It’s the question every self-directed and SMSF investor wants the answer to!
Financial commentator and stockbroker Marcus Padley shared some wisdom from his 32 years of experience in the stock market at a Skaffold webinar.
“I think it boils down to picking top stocks, and of course, Skaffold is a stock research tool designed to help you do that, which is why I love the product”, Marcus said.
“Prior to 1974 nobody bought balanced funds and nobody invested in the stock market just because it was there, like the way we do now. Instead what you had to do was pick stocks. And this is why books like The Intelligent Investor became famous, because to be successful you had to do better than the average punter”, Marcus added.
Marcus joked, “I have a favourite saying, ‘The money is in the unexpected’. If you look back over the last 10 years you’ll find some incredible gains and some incredible losses, and what you’ll find is that the stocks moved because things happened to them that weren’t expected.”
“For example, if BHP is going to make exactly what it’s expected to make every year you will not make money out of the stock because if it hits the numbers the market expects, the share price won’t move”, Marcus explained.
Marcus recommends taking a top-down approach when hunting for top stocks.
He encourages investors to ask the question: What is going to happen this year that isn’t expected?
“That’s where the money is. The money is not in pouring over P/E ratios and dividend yields and forecasts that everybody has already reviewed. The unexpected is where money can be made, and where it is lost. So you have to think about the good and bad things that may happen”, Marcus said.
Create a watch list of great businesses
Marcus suggests creating a watch list or spreadsheet and populating it with great businesses (Skaffold members can find top stocks easily with a powerful stock rating system and easy-to-use filter).
“Making money in the stock market really just boils down to the stocks on your spreadsheet”, Marcus said. Is your watch list full of top stocks?
“What you want to do is to use tools to find or pick a list of what I call preferred stocks. The other half of the process is to find the right time to purchase the stocks”, Marcus advised.
How does Marcus Padley find a list of top stocks using Skaffold share investment software?
Step #1: Think about what criteria is important to you as an investor: low price to earnings ratio, rising earnings per share, strong return on equity, high yield, undervalued stocks? Are there particular sectors you want to focus on, or avoid?
Step #2: Use Skaffold’s filters to reduce the market down to a handful of the best stocks to invest in. Check out how Skaffold’s powerful filter can give you a shortlist of the best stocks to invest in.
Step #3: Make a watch list or spreadsheet of these top quality stocks. Skaffold members can create unlimited watch lists.
Step #4: Time your entry into those stocks as best you can. At Skaffold, we believe the best time to buy shares is when the share price is trading at a discount to the business’s intrinsic value. Read more about the best time to buy shares here.
Create alerts to let you know about opportunities
Skaffold’s custom alerts feature makes it even easier to track changes to your watch list and be the first to know when new opportunities emerge. Set up a custom alert and you’ll receive an email every time one of the stocks in your watch list moves above or below a certain safety margin, has a significant price change or has an update to its intrinsic value or Skaffold Score. See how you can easily set up a custom alert.
If you have just discovered Skaffold stock market research software and would like to take a look at what Skaffold can do for you, try our free demo or book a no obligation demo and experience Skaffold first hand.