We may hear different song of stock market each day, sometimes could be a nice melody, sometimes could be noisy heavy metal sounds. Each of us is a composer of this song of stock, which is made up of both market emotions and fundamentals. Let’s learn to appreciate different type of song of stock market, position oneself with the right investing strategy:
1) Pop Song
– This popular song of stock market is welcomed by mass market, following trends together to buy up in a bull market. Mastery of this song requires understanding the mass market trends (eg. technical of share prices and fundamental business and economy), leaders of mass market (usually smart investors) would has more capital gains, last batch followers (usually retail investors who listen to news) may needs to pay for lunch when the music or song has stopped.
2) Rock Song
– This rock & roll type of song is similar to cyclic stock market, traders who enjoy the up and down in price rhythm, using volatility to create potential capital gains. Emotional control is key to through the cyclic song of stock market. There are different degrees of rock music, from little noisy market (short term trading) to highly volatile stock market (longer term market cycle trading).
3) Blue Song
– This sad song of stock market is welcomed by those who know how to apply the reversed strategy in stocks with shorting, making profits with falling down in share prices. While the mass market is in great pain during depression with different degrees of market crisis, this group of blue song lovers would enjoy the sadness of market, position correctly in an opposite direction of mass market.
4) Love Song
– Most people like love song but we should not fall in love with every stock. We could love a person for life, there are also stocks which long term investor could love for life time, with condition that it remains a giant stock with growing cash flow.
5) Country Song
– This group of country song lover also likes to invest in regional stock market through stock indices of country. The pace of investing is stable, little volatility, helping to calm oneself, making money with less stresses.
There are many other types of song of stock market, sometimes could be a blend of different songs, the style could change from time to time, from pop to rock, etc. Which is your favorite song of stock market? We don’t have to force oneself to listen to song composed by others, when the melody is not right, we could walk away, staying out of the stock market. When the right song is back, we could join the stock market, applying the preferred stock trading or investing strategies, aligning to our interest or personality.
Learn from Dr Tee free investment courses to appreciate different types of song of stock market, discovering your interests in stock trading and investing.
