“The quality of life is determined by its activities” ~Aristotle
When I have started investing, found a general practice between investors that, no one interested to invest money when the market is its peak. In other word, if you ask any investor about the time he wants to avoid investing, the answer would be the same, at the peak of stock market. Is that true? Can we invest when stock markets are peak? What do you think? I think we can easily invest. The reason behind my answer is, market peak doesn’t mean all the stocks are overvalued. In the same time, you never going to get all stocks as undervalues when market is its bottom line!
I am coming to the point. Anyway, for an ordinary, retail investor, it is difficult to find an undervalued stock when the market is peak or find an overvalued stock when market is its bottom down. So the simplest action is to avoid investing when the market is at the top. If you are not investing when the market is peak, then what would you do as an investor? Naturally your activity as an investor limited when market is in its top. So, it’s the time to identify some constructive activities to do when you are not able invest in the stocks. Here are three activities any investor can practice at his or her free time or when out from the market.
1 Plan and Accumulate Capital – One of the major problems facing by any retails investor is, the insufficiency of capital when it really required investing. In this context, why don’t we think about a right accumulation plan? Generally, we do not do anything when market is up with bullish trend due to the fear on losing. But, accumulation doesn’t require taking care on any situations. It can start at any time. If not investing, think about accumulating capital little by little. Go and start a special savings account to add money little by little to it when surplus is in your hand. This would help us creating enough capital for future use. This habit certainly helps you to have enough funds with you to get right shares at right price!
2. Identify Next Possible Investment Candidates – As I said earlier, stock market peak is our time to not do any investing activities but to do something constructively. If you really have bored without any activities, think about creating your own list of best possible investment candidates for the future. Enter to the market and identify the best candidates available there. Look around in the public places to understand the must have products and services. Identify right companies who offering services or products that public not want to avoid or live without. Frequently talk to people to understand their interests on products and services necessary for their life and companies who are in the picture with such products and services. Take frequent look at shopping malls to identify what people frequently buying to survive. This would help you to create a best list of wonderful companies who offering products and services which is unavoidable by public anyway. Some of the companies from this list could be your next perfect investment candidates!
3. Conduct Your Research and Study – Research and study on the investment possibility of a business is an integral part of successful investor. Take your list created in the second step and kick start your own research. Why such product or service are in the group of necessities, what are the status and background of the company who manufacturing this product or offering service, how efficient and innovative is its management, what are the strong points it have to survive with market with bad time like recessions, what are the possible weakness, how well its financial performance for several past and present years, who all are its immediate competitors, what are the major advantages this product or service offering than its competitors, what is its earning potentials, how good the company is to treat their investors, all should come under your scrutiny. Dear friend, it is not a one or two day process but, it may sometime take considerable time!
Above mentioned 3 activities not only help you to finalize your next investment candidates but also you can spend your time constructively when there is no activity remaining for you in the market. I am sure, if you do so with total passion and dedication, it would take considerable amount of time for you to get final result with the list of your next investment candidates!
Dear Readers, how many of you feel all these activities could finish within one month? If you confident to say you can do it within one or two month then, what would be your reaction if I call you a big fool?
Picture: mikebaird