
By John Reizner |
Would you keep a cool head if a bear market in stocks dented the value of your retirement fund and your stock portfolio? How would you respond as an investor if business conditions turn downward and the stock market drops precipitously? Will you continue to be a calm and collected investor if your friends or colleagues are losing their jobs, the housing market cracks and your brokerage balance falls every week?
That another bear market will occur is the closest thing to a guarantee in stock investing that investors may ever get. Stock punters used to ever-rising stock prices may be in for a shock to their bottom line one day in the future when stocks begin to fall into bear market territory.
By reading one of the best investing books, "A Way to Wealth: The Art of Investing in Common Stocks," available here, investors may understand how the stock market works and begin to hear their stock investing inner voice as they position their investing decisions over time. In his concise book the author explains his simple two-step method of profiting in stocks over time through both bull and bear markets.
Understand how to better react to your emotional reflexes as they affect your decision-making during times of market volatility. Understand how to better navigate portfolio destroying events such as bear markets, financial crises and being your own worst enemy in your trading.
Investors may need these skills during the next bear market that unfolds in the stock market. “The Art of Investing in Common Stocks” tells the story written in the first person how Reizner found success with his investments in the early 90’s during banking and real estate depressions - how he protected his stock portfolio through the aftermath of the March 2000 dot-com crash.
Reizner relates to readers through the lens of his own perceptions of the marketplace how he aimed his stock buys to profit over a period of years. He utilized his low-maintenance stock investing method that he created to time his purchases - attempting to at least double his money or greater with his picks.
By actual examples illustrated with annotated charts he shows how investors may buy stock and potentially profit by steeling their emotions – how they may buy stocks that others might be afraid to buy - that Wall Street does not recommend and that are unpopular in the media. Then he believes investors may have the chance to make outsized gains over time.
The gold in best investing books such as "The Art of Investing in Common Stocks" available on Amazon here is partly the author’s simple and effective investing method that happenbed to bring him success for fifteen years.
Reizner's method embodies a contrarian style of investing. For example, in 1992 during a real estate depression he bought the stock of a real estate bank that most analysts thought was on the brink of failure. That was the chaotic investing backdrop for bank stocks when the author bought shares of Wells Fargo solely because it was a buy according to the method that he created.
Describing in his book how he felt fear when he bucked the investing crowd and bought the stock – he recognized how his fear was a positive indicator in his decision-making. Reizner made many times over of his original investment over a period of many years in the stock.
How did your stock investments fare in one of the biggest stock market manias of all time - the internet stocks bubble that culminated in the Y2K top in March 2000? Did you buy at the top? Or did you not sell your tech stocks in time? The top in March of that year ushered in a two years long bear market where many dot-com stocks fell by 90%.
Reizner illustrates in several case examples how he made money during the 2000-2002 bear market using his simple technique - profitably closing out trades in Deluxe Corp, Tenet Healthcare, Dun and Bradstreet and Family Dollar Stores. He shows that it is possible but not easy to be profitable during the price swings of a declining stock market. In addition, the author illustrates his stock picks that did not work out that were unprofitable trades in the aftermath of the bubble - closing out Great Lakes Chemical and USG at a loss.
Reizner practiced his stock buying method for fifteen years during both bull and bear markets.
Author’s note:
The method in “A Way to Wealth: The Art of Investing in Common Stocks” brought me sustained investing success while the other avenues I pursued mostly did not pan out. The dumbest thing that I ever did was to stop using the method that brought me such success. I wanted to learn new things and studied many new techniques of investing and trading. But the result of learning these new avenues of stock investing became much more potentially valuable as readers of this blog may learn by reading new and exciting methods of investing here and here.
In these articles I show how by using just one stock chart and one indicator as a guide, investors may potentially remain invested through the bulk of bull markets and avoid the brunt of devastating bear market declines.
Learn more about my concise book on stock investing on the book page, the FAQ’s and on Amazon here.
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