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How to Insulate Your Wealth from a Correction

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How to Insulate Your Wealth from a Correction

By Dale Gillham

Investing in the stock market is one of the most powerful strategies you can use to accelerate your wealth. Although, in my experience, a common theme among those who do invest is a firmly held belief that all they need to be successful is a superb set of trading rules.

If fact, ask anyone who trades the stock market if they know how to buy a stock and, chances are, 100 percent will say yes. Ask those same people if they know the right time to sell a stock, and 90 percent will say either no or that they get it wrong most of the time. Unfortunately, the reality is that most are focused on achieving quick returns rather than developing the strategies that will enable them to build long-term wealth.

In my book, one of the key criteria of astute investing is to consider when and how you will take your profits—in other words, you need to consider your exit strategy before you invest. Because trading is not about how much money you can make; it is about how much you do not lose over time.

Given the recent speculation of late that the stock market is likely to crash, there is no better time to learn how to protect your capital. Although, let me say while I believe the market is due for a correction, I do not believe it will crash. That said, irrespective of the direction of the market, it is important to always use sound money management strategies, so in this article I will share with you some simple but powerful strategies you can start using straight away.

Don’t buy stocks that are falling in value

In my experience, I find that when a market is falling, most investor’s make errors in judgement that result in costly mistakes.

As the price of a stock falls, its dividend yield rises and, therefore, becomes more attractive to investors seeking dividends for income or for those who may be seeking a bargain. Some would have you believe that a high dividend yield means the stock is inexpensive and, therefore, an opportunity for investors to achieve good capital gains. But what this really means is that the stock has fallen to such an extent that the dividend yield is now much more attractive.

Investors, in general, don’t want high-risk investments, yet, this is exactly what they get when they buy a stock that is falling in price just to receive a high dividend yield or because they perceive the stock price as being cheap.

To be considered a solid investment, the stock must represent good value, first and foremost, in terms of capital gains. In other words, you should look for undervalued stocks that are likely to achieve solid growth in terms of capital gains and a good income in the future.

Have an exit strategy

As I mentioned earlier, one of the most important aspects when trading the stock market is to have an exit strategy in the event you are wrong and the stock price moves against you or to protect profits. The fact is, if you want to be consistently profitable, you need to know not only how and why you are entering a trade, but more importantly, when and where you will exit.

Most investors never give this any consideration because when they invest, they expect the asset to rise. And while the asset may indeed rise, the value of the asset is not realized until you sell. Consequently, this equates to unrealized profits, as the asset could fall in value, which has the potential to impact your overall returns.

Apply your exit rules

In my book, Accelerate Your Wealth, I outline a number of strategies you can use to protect your capital. The simplest and safest is to apply a stop loss before you enter a trade. Astop loss is simply a price point to exit a trade in order to protect your capital. Depending on the volatility of the stock, I always recommend setting a stop loss of between 10 and 15 percent below your buy price or from its most recent high.

In reality, when it comes to trading and protecting your capital, a stop loss is your best course of action, as it will minimize your losses and has the potential to maximize your profits. Indeed, the better you get at selling, the more money you will make.

“Trading for profit is about using sound money management rules and good exit strategies”.

Another strategy you can use is to apply trend lines. Trend lines are one of the oldest and most effective methods for deciding which stocks to buy and sell, yet, they are one of the most underutilized tools. Why? The answer is simply lack of knowledge—many investors do not understand how a trend forms or how it unfolds over time.

There is an old saying that you should always trade with the trend. Indeed, if you can correctly ascertain the direction of the longer-term trend, either bull or bear, you can pinpoint, with great certainty, the right time to buy and sell, which means you will be far more profitable. That said, while it is important to always trade with the trend, if you were to always wait for the long-term trend to confirm, many low risk trades would be missed. And that is why trend lines are so effective.

In theory, applying trend lines is very simple—buy when a stock crosses above a downtrend line and sell when it crosses below an uptrend line, which can be done, quite simply, by applying a pencil and ruler to a bar chart. The major advantage of using trend lines is that they indicate when a trend may be changing before confirmation of the actual change in trend is evident.

The advantage of applying trend lines is that you will enter a stock in the early stage of an impending uptrend, but more importantly exit a stock at the early stage of a downtrend starting and in so doing protect your wealth.

 Don’t exit too early

Another common theme that is prevalent among traders and investors, particularly those new to the stock market, is that they exit profitable trades too early for fear of losing their profit.In fact, you may be surprised to learn that a lot of investors tend to sell winning stocks only to buy losers, even though the winning investments they sell subsequently outperform the losers they continue to buy.

The investor rationale for such action is driven by the fear of taking additional risks with stocks in which they have already made money. Unwitting investors believe that their winners, having already risen, are now more likely to fall.

But trading the stock market for profit is about cutting your losses and letting your profits run.

Therefore, unless a stock tells you to sell by triggering one of your exit signals, do not sell.

I promise you, if you follow your rules, you won’t fall into the trap of becoming an average investor, which means you will be far more profitable and successful in the long run.

Don’t exit too late or worse not at all

When a market is perceived as bearish, this does not mean that you can’t make money, because even in bear markets you will find stocks that are rising. The inverse is also true in a bull market, as some stocks will be falling in price. That said, when a market correction occurs, many investors let market sentiment influence their decision making and,as such,exit stocks far too late as they perceive that the bull run will go on forever. In reality, investors hang onto their shares that are falling in value in the hope that the stock will return to its previous highs.

However, you need to be aware that if a stock falls by 10 percent, your remaining capital needs to rise by 11 percent to break even. And if you continue to hold and suffer a 50 percent loss, then your remaining capital needs to rise by 100 percent just to break even. The longer you continue to hold onto stocks that are falling in value not only increases the overall risk to your portfolio but the harder it is to get back on top again.

But if you apply the exit strategies discussed earlier and wait for the dust to settle, you will not only be protecting your capital, you will have the added benefit of being able to compound more ofit. In reality, taking small losses is far better for generating good portfolio returns and protecting your wealth, and more importantly, sleeping well at night.

Be proactive in managing your portfolio

If you take a more proactive approach in managing your portfolio, you will be more profitable and endure less stress. In my book, an active investor is someone who dedicates a few hours a month to managing their portfolio and they typically, turn over, on average, twenty to thirty per cent of the stocks within their portfolio in a year, although this will depend on market conditions. They also implement some simple well-defined rules that eliminate the uncertainty and fear that the majority tend to operate under when buying and selling stocks.

If you decide to become more active, I recommend developing a portfolio of between 8 and 12 stocks from the top 20 by market capitalisation, although, depending on your level of knowledge, you may want to consider stocks out to the top 50. What you will come to discover, as I outline in my book, is that smaller portfolios with holdings concentrated in solid blue chip stocks represent lower risks, as you will have less stocks to manage and it will deliver more profitable results.

So, if I were to ask if you want to accelerate your wealth with less risk and less stress, would you choose this option over making less money and having more stress. I know which option I would choose. Remember, it’s your money, your choice.

Good luck and good trading!

Dale Gillham is Chief Analyst at Wealth Within and international best-selling author of How to Beat the Managed Funds by 20%. He is also author of Accelerate Your Wealth: It’s Your Money, Your Choice, which is available in book stores and online at www.wealthwithin.us.

How To

Guest Posting

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Guest Posting 1

The internet has set up brands at every corner of the street and getting people to visit yours is a mix of skill and art. The attempts to layout customer roadmaps to your brand which aren’t abandoned are not new and the struggles are the same as before. In fact, the struggle to have your brand heard has piled up as competition keeps emerging and viewer attention span keeps getting fragmented. This has led to a surge in brands using conventional advertisements to highly compress their message to the audience.

This is not the best gameplan to bet on. Ads are perceived by many as intrusive, insincere and housing an ulterior motive. The audience is bombarded with ads from every angle and making it shorter does not really help. Most people don’t react the same way to guest posting.

A guest post is a piece of brand journalism which lives on a publisher’s website. Sponsored posts are an advertorial piece of long-form writing that is created to be highly engaging. They avoid the intrusive and abrupt conventional-approach of ads and indulge in a more respectful and subtle modern-approach for recommending your services or products.

Choosing the right platforms to publish your guest post is crucial as the platform is seen as your partner and representative. Your chosen platform must balance between writing a blog post and a traditional advertisement, stray away from being intrusive and stick with being subtle and respectful. At Global Banking and Finance (GBAF), we offer the opportunity to bank on our decade-long experience and expertise in writing balanced content like this.

How Can Guest Posts on GBAF Help You?

Constantly investing time and effort into writing and publishing on your blog is great for fostering and strengthening your already existing audience relationship but this doesn’t help you reach a new audience.

Guest posting opportunities on our platform gives you access to an untapped audience base. This is a significant advantage in two ways:

  • Familiarity: We have built our audience through our authentic, thought-provoking and storytelling writing nature. Our audience is familiar and receptive to this writing style. When we adapt your content in the same format, it allows your content to have better reception compared to traditional ads. Also, your content will adapt to the environment of content which makes it feel natural and less abrupt or intrusive.
  • Trust: When a consumer learns about your brand through someone they trust (someone like a renowned brand, friend, some industry authority, etc), they are more likely to trust you, too. Our audience’s trust means a chance for your brand’s voice to be heard. It also means having customers who have completed their journey of brand choice. When they choose you, it will be an additional choice of transition from our platform rather than a new choice of approaching you. They only have to go half-way.

With amplified brand reach and redefined trust, your brand visibility and credibility will be boosted. We also help you boost visibility by leveraging our social media channels which currently have 135k followers and keep growing every day.

Another major area of impact when doing guest posts with GBAF is the focus, delivery and expertise of writing. The audience members will engage with your content much more than they do with your traditional ads. This will increase the chances of convincing the customers who doubt, skepticize and speculate becoming customers of your brand from afar. Writing to deliver your promotion with value-driven content also allows you to plug in a recommendation at a crucial point of the problem with your brand as the solution.

Lastly, value-driven content avoids the intrusive BUY THIS! style of writing. Here, the focus is on communicating your knowledge and therefore allows you to establish yourself as a thought-leader in your niche.

All of these combined benefits act as a catalyst to boost your brand reach, funnel attention to your brand, gain a competitive advantage and knock down all other challenges presented in separating yourself from your competition.

Final Thoughts

Brand adoption is slow. Abandoning an old familiar brand route for a new one is difficult. People rarely reach out to brands and they sprint the other way if they see brands reach out to them through conventional and dull ads. In such a deadlock scenario guest posts can provide the perfect strategy to bet on.

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How To

Why Guest Posting is Your Best Bet

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Why Guest Posting is Your Best Bet 2

In a scenario where new businesses are popping up everyday, one of the major challenges brands face is that of devising an organic and effective way to get the attention of their target audience. And one of the first solutions that comes to mind is the internet and consecutively, digital marketing. Even though its all-pervasive nature has made it both super-easy to reach people across the globe, the internet also comes with its own set of challenges. In this article, we will discuss the tough-to-crack parts of digital marketing, things that almost every brand representative or marketing executive has to face in the present date.

The oversimplification of digital communication has deceived many brands into believing that it’s the only way to reach their audience. However, the reality is hardly so. Today, there are more platforms and media formats than there have ever been before and newer ones keep emerging everyday. As a result, the netizens have developed a rapidly decreasing attention span. As a result, brands are wrestling to fit their message into as tiny a space as possible in what can only be called conventional methods of advertising.

For many brands, digital marketing proves to be an ordeal that takes years to crack, all the while draining the brand’s potential for more business and/or larger reach. It is worth noting that one of the major challenges that most businesses face is that of people avoiding ads altogether; no matter how good your ad is, chances are that people don’t want to see it, resulting in zero engagement. The second and bigger challenge is that short messages don’t convert those who are unaware of your brand, to brand loyalists. Instead, these ads are likely to affect only those who are already considering buying into what your brand is offering, which might be a small share.

This is where Global Banking & Finance Review (GBAF) comes in. We offer you the opportunity to overcome both the challenges (and more) in one go through our guest post services.

Guest Posts Have An Edge Over Normative Advertisements

Guest posts are advertorial pieces of long-form writing, created with an aim to engage the audience by taking away the impression of normative ads. How? Sponsored posting articles are so designed that they address the audience’s demands or queries, and also offer your brand as a solution instead of point-blank marketing. Consequently, this makes the audience spend a longer time engaging with your brand than they would do with, say, a pop-up ad. Through a guest blog post, your brand has the space to engage in a fair exchange because the article delivers value to your audience rather than being a conventional sales-driven advertisement.

To sum it up, sponsored posts fall right on the sweet spot between a blog post and a traditional advertisement on the spectrum of advertising.

Here’s Why You Should Run Guest Posts on GBAF

At GBAF, our team understands the importance of the environment in which your brand is introduced to an audience, something that leaves a lasting impact on their minds. It goes without saying that this very impression will influence and drive their future decisions on whether they want to engage with your brand and buy what you’re selling. Hence, it is our staff that is usually responsible for writing the posts that go up for your brand on our website. This allows for the sponsored post to merge in seamlessly with the existing content in our website instead of sticking out like a sore thumb. The aim in doing so is to create these posts in a way that does not distract or seem abrupt as guest posts are meant to be adaptive to an existing environment. So, even though it is essentially promoting your brand, a sponsored post is more of a brand journalism piece than an ad.

On our platform, we understand the importance readers attach to authenticity and value. This also allows GBAF to have a firm grip on introducing your brand effectively while simultaneously catering to the audience’s needs. Our team works around the clock to gain our audience’s trust by continually delivering authentic and value-driven content to our readers for more than a decade. When you partner with us, that resource pool is easy to tp into. When a consumer learns about your brand through a reliable source (for instance, someone like a renowned brand, friend, some industry authority, etc), they are more likely to trust you, too.

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Why You Need to Take Guest Posting Seriously

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Why You Need to Take Guest Posting Seriously 3

When customers are largely in control of marketing conversations, traditional advertisement has lost its touch. How you educate your prospects and out-educate your competitors now win the battle and generate leads.

If you’re the spokesperson of a brand or if it is your job to tell a story that your customers care about, you know how important it is to be generous, to share your ideas on a platform that promotes storytelling, and to position your brand as the most trusted partner for your customers.

The challenge with quick, easy micro-copy is that it fails to make an impact. It’s like a quick-fix that we try to use in everything we do. However, quick-fixes don’t heal a burning pain-point. A thoughtful, easy-to-read, user-friendly guide does.

At Global Banking & Finance Review (GBAF), we help you help your customers. Here’s how.

Guest Posting: How it Works

Guest posting is the art of telling your story to your audience without shoving it down their throats. It’s not an advertisement, but a thought-leadership content piece that educates & promotes your brand to your target audience without interrupting them.

  • Our editorial team works your content piece to present your brand on our website
  • The sponsored articles adhere to the context, the tone, the voice of your brand and represent it in the way you’d like to portray to your audience
  • The content piece is lucidly written and only does one job, i.e. educating your audience
  • The piece is long-form of content that allows your target audience to engage with your brand longer (much more than an advertisement)
  • It doesn’t distract, interrupt, or intrude the audience
  • Sponsored posts are designed and articulated to solve the audience’s pain-point and showcase your brand as a solution-provider

Why Should You Run Guest Posts on GBAF?

GBAF is a platform that garners a community of over 135,000. Here are four reasons for which you should run guest posts on GBAF:

  1. We help you increase the engagement with your audience: We don’t depend on surveys to understand what your target audience wants. For the last ten years, we have been serving various kinds of readers. And we know them personally. Thus, we know how to place your content to increase engagement.
  2. We put your audience ahead of the marketing funnel: When you run an ad, you start from scratch. And as a result, the first step is always to start with the beginning of the marketing funnel. When you publish a guest post on our platform, your target audience already begins to trust you since we’ve put years of work in building the community.
  3. We help you generate leads: An ad is interruptive. When you submit a guest post on GBAF, it teaches instead. And directs the audience to take action. As a result, you generate more leads. In this era of marketing, the brand that educates better, profits more.
  4. We offer you cost-effective solutions: When you run sponsored articles on GBAF, you’re in charge of your budget. You decide how much you’d like to spend per month. And we support you with cost-effective solutions backed up with the results so that you can calculate your ROI upfront.

How to Submit a Guest Post on GBAF

  • Check categories:
  • B2B: CSR, Green Tech, AI & Big Data, Ongoing Training for Employees, Manufacturing
  • B2C: Travel Destinations, Trends on Buying a Home, Working Remotely, Electronics
  • Follow guidelines:
  • Format: Word format
  • Send at: [email protected] (or use this page to submit a guest post)
  • Length: 750 – 1000 words
  • Image: We need an image of the author (specifications: width – 800 px. & heigh – 600 px.) with original credits
  • Additional requirements:
  • Author Bio: Provide an author bio (name, title, affiliation, bio, and contact). You can add a link
  • Profile: Give a brief overview of the company, key information about the company, major projects, certifications, and company logo. Please submit the profile in word format

We review your submission and if it adheres to our submission guidelines and quality standards, we will connect with you before publishing the article.

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Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

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