Best Investment Ideas: Focus on the Trend
Do or be done in. Sol Palha
Updated March 2023
Everyone is looking for the best investment idea or ideas, but no one focuses on the strategy. The best ideas will not help you one iota without a proper strategy. You need to have a plan, you can go to a fight with the best weapons, but if your opponent has a superior strategy, he or she is going to be in a position to give you a sound thrashing.
Contrarian investing would probably make it to the top of the list, but an even better strategy takes contrarian investing one step further. If you are new to investing, this page has many free resources for novice investors, Top 10 investment resources for Novice Investors.
Unfortunately, most contrarians are nothing but fashion contrarians (discussed further below) who are full of hot air; in other words, they are all talk and no action. If you listen to such individuals, take their advice with a grain of salt and a shot of whiskey.
Separating the Riff from the Raff
The majority of these experts have not followed one piece of their advice. If they had, they most would be bankrupt today, and those who follow them usually lose their hard-earned money. These experts’ only role has been to bastardise the real meaning of the word “contrarian”. Therefore, before you try to find the best investment ideas, ensure the people putting out these ideas are qualified. To do this, you need to be able to separate the riff from the raff. ”
Fashion contrarians are in it for the glamour; they want to create the impression that they are doing something different, but in reality, they are part of the crowd. These investors with the herd mindset only imagine that they are doing things differently, but the moment panic or doubt is in the air, they take flight like bandits being chased by the hounds of hell.
Tactical Investor Best Investment Ideas
While we at the Tactical Investor embrace the concept of contrarian investing, our focus is on joining the Primary rules of contrarian investing with the powerful concept of mass psychology. The combination of the two methodologies creates an incredibly robust system. Psychology is the key driving force behind almost every human action, and understanding it could significantly improve your overall experience and results as an investor.
To this winning combo, we add technical analysis, and the result is an unbeatable system. This led us to craft the trend indicator, a tool that magnificently combines the supreme elements of technical analysis with the most compelling aspects of Mass psychology.
Best Investment Ideas with A Contrarian Twist
Verily, discipline and patience are the hallmarks of triumphant investing; no gain is achieved hastily, for everyone would be adept in it if it were so.
Common media (journals, newsprint, gazettes, televisual channels, etc.) ought to be treated like putrefaction, a waste product that reeks awfully. Peruse these outlets to determine what the masses are convulsing about and what ought to be shunned or embraced. Emotions should be boiling over before making any move. You do not confront the masses merely because they have jumped on the bandwagon; it is only when the bandwagon is overburdened and about to collapse under its weight that you should seek an exit and vice versa.
Technical analysis plays a pivotal role in investing, whether or not you opt to be a contrarian investor. You must devote time to grasp the fundamental principles of this crucial field. Try not to follow or focus solely on the most popularly used Technical analysis indicators. Once you comprehend how they function and operate, you will be amazed at how effective some lesser-known tools can be.
Spend time understanding the markets or the stock market sectors you intend to play. Devise a prudent strategy. Don’t be unwise; no labour corresponds to losses. The strategy should entail profit objectives on every trade and an exit plan if the enterprise fails.
Learn to unwind; it’s arduous to triumph if you don’t unwind
Mass psychology takes Contrarian investing to the next level
A real contrarian is familiar with the basic concept of mass psychology. If you are unfamiliar with these rules, you are doing yourself a disservice and should catch up ASAP.
The most basic tenet of mass psychology is that one does not abandon ship until the emotions have hit the boiling point and vice versa. For example, if the market is bullish, you do not abandon ship just because the masses have jumped on the bandwagon. Instead, you wait for them to move from the cautious to a euphoric phase before bailing out. Once you have a sound strategy, you can start looking for the best investment ideas because you can now. Finding what stocks or sectors to invest in is relatively simple if you know how to invest.
Conclusion
A genuine contrarian only jumps into the investment as the asset trades at mouth-watering levels and blood flows liberally in the streets. An astute investor buys when the crowd is paralysed with terror and panic and sells when the masses are jubilantly buying. When you are feeling ecstatic, flee for the exits.
Overconfidence is a sign that you are treading on thin ground. Even the best traders can suffer setbacks; the key is not being too confident or arrogant, as picking yourself up after a fall is challenging. Always utilise stops as the markets are currently very volatile.
Investing is really about emotions. You are overcoming your emotions and preying on the crowd’s emotions (trepidation or gluttony) by taking a far-reaching position usually opposed to the crowd’s.
When you take a position, and people look at you with contempt or disbelief, you know you are doing the right thing. When they tap you on the back and nod in agreement, it’s time to flee for the exits. Buy low. Sell high.
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