How to Beat the Market over the Long-Term

By Stephen Sutherland, author of Liquid Millionaire.
Posted in the Category of ISAS, Investing, Stock Market, Wealth Building on 30th March, 2011.
Tags: investment fund, isa investing, isa trend investing, stock market, stocks and shares.

How to Beat the Market over the Long-Term

Some people want to know how to beat at the market. This is not easy to do. In fact 90% of professional fund managers fail to beat the market. And so notice here that 10% do beat it and many of those 10% will be people who beat it consistently. These are the ones to focus one. The method I use that has fortunately helped me to beat the market since 1999 is something called ISA Trend Investing.

This method of investing is not flawless, but the timing element has managed to catch the start of every single bull market (up market) in the last 50 years. As always, timing is everything.

ISA Trend Investing in 3 Simple Steps:

Step 1 - Determine Market Direction
Step 2 - Find a Quality Fund (Using HIRE CAR™)
Step 3 - Time Buys and Exits

The way you aim to beat the market indexes over the long-term is simply by following these three steps.

Step 1 – Determine Market Direction

One of the best ways of determining market direction is to look at charts. A stock chart is a graph that displays the price and volume history of a given security or index over a period of days, months or years.

Price and volume charts help you to see what the professionals are doing so that you can follow in their footsteps.

Step 2 – Find a Quality Fund

I like to compare how funds have performed versus the Nasdaq Composite. My aim is to beat the Nasdaq. That means if you can find funds that are currently outperforming the Nasdaq Composite; I believe they have a good chance of continuing to beat it in the future – although this is in no way guaranteed.

Even though past performance is no guarantee of future performance, my thinking is, if a fund manager has performed well in the past there is a high probability of them doing well in the future.

The two things that tell me a funds quality are:

• The fund managers long-term performance
• The fund managers short-term performance

On Friday I will tell you about: Step 3 - Time Buys and Exits

Until the next time my friend.

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