The Only Way to Judge the Market
By Stephen Sutherland, author of Liquid Millionaire.Posted in the Category of Investing, Stock Market, Wealth Building, Financial Advice on 31st March, 2009.
Tags: financial freedom, market health, obama, price, volume.
Despite the recent surge in stock market confidence following Obama’s $1 trillion economic turnaround plan there is only one sure fire way to judge market health.
Today I want to share with you what that is so that you can make your own investment decisions based upon facts rather than media hype, enabling you to safeguard your financial future.
Study the Charts
If your goal is to achieve Financial Freedom then you have to follow what is really going on rather than what the media or governments want you to believe. The only way to do this is to study the price and volume action of the stock market on charts.
Price and volume are vital in investing because 75% of the stock market’s movement comes from the big institutional investors.
The big professional investors have the largest influence on the market’s future direction.
Institutional investors can be fund managers, banks, building societies or insurance companies.
And if these 800 pound gorilla investors are buying, you can jump on to their coat-tails.
And if they are selling, you can quickly switch out on to the sidelines until the market improves.
Price and Volume are Key
Therefore when the likes of President Obama announces a $1 trillion investment, price and volume action is the only way that you can really know how the news is going to affect the market’s future direction.
So far, the price and volume action is positive –which means that right now is a great time to be invested. However, the market can change its health in a matter of days which means in just one week’s time, the market might be unhealthy and not safe to invest. This is why you have to take the market one day at a time and why I have to watch the market day by day so that I can react quickly should the need arise.
If you have any questions about studying price and volume action and how it can help you reach Financial Freedom then please contact myself or a member of my team for a chat. You have my word that there will be no jargon, no selling, just facts.
Your friend,
Stephen Sutherland
The UK’s Leading Authority in ISA Trend Investing and Author of Liquid Millionaire
