still learing about stock markets but was wondering what stock market I would be most likely to make a long term profit from investing in. My friend said Nasdaq…any ideas??
Easy answer but you are probably not going to believe me. Unfortunately people always prefer to make investing (also life in general) harder than it has to be.
1. Identify all the broad market index’s that you are considering investing in, whether in be in the United States, Brazil, China, Europe, Emerging Markets …etc. If you want to really be detailed, you can also identify sub sectors if you want to…Technology, Health Care, Financial’s, Commoditieses, Retail, Consumer Staples..etc
2. Find Mutual Funds or ETF (Exchange Traded Funds) that emulate these index’s, and track them on Yahoo Finance site under My Portfolio. Have the same start or trade date for all…example..first trading day of 2010.
3. Invest in the Index that is going up the most in comparison to the others…you could even invest in more than one Index if you like. These will change over the years. Example, the Nasdaq was the leader for US index’s during the dot com era.
3. Track results and always stay with the Index or Index’s that are leading the others. Just as if you were tracking winning sports teams.
4. Good rule of thumb is to stay invested in an Index as long as it is trading above it’s 200 day moving average. You can find this by selecting the 200 day simple moving average (SMA) under the charting program on Yahoo Finance. Select technical indicator and enter 200 on simple moving average. When the index trades under the 200 day…move to money market or scale down your investments. I prefer being "out of the market" when it trades below 200 day moving average.