One of my favorite questions to ask someone who sees the potential for becoming wealthy through the stock market is, “Do you want to trade, or do you want to make money?”
As soon as you realize that it’s not about trading and investing as much as possible, you’ll see just how easy it is to start making a nonstop investment income!
All it takes are these 4 steps…
Step 1: Pick out stocks to invest in
As you likely already know, I could go on for about a year in this step alone. There are dozens of strategies, all sorts of platforms, and countless ways to pick out stocks set to climb.
But for the sake of brevity, I’d recommend doing two things:
1. Find the system that works the best for you…and stick to it! Does the System-60 method bring you consistent profits? Or maybe you prefer the Pennies from Heaven or Bouncer stock systems that were taught at the Annual Wealth Summit. Choose one and use it to pick out the stocks you want right now.
2. Or do this simple exercise: find stocks that respect a particular moving average (like the 150-day or 200-day moving average), and buy those stocks when they jump up over that moving average.
Either way, split your investment capital up into several positions and move on…
Step 2: Set stop losses
For EVERY position you have, set a stop loss that will close you out of the trade automatically should the stock price dip to a certain amount.
Our different trading systems show you how to set and handle the stop losses for that particular method, but you can also place a stop loss that stays within 5% to 10% of the stock’s high price since you entered the trade.
This allows you to lock in profits as you go!
Step 3: Ignore the “noise”
As a WSI TV member, you’re probably starting to notice a theme running through our brand…
Successful investing is about keeping your emotions out of the game, and the best way to do this is to ignore the noise, by which I mean the talking heads on TV, news articles, any so-called expert trying to give you advice.
Even Richard Thaler, who won the 2017 Nobel Prize in economics and founded a successful hedge fund, explicitly advises to not follow the news!
And Warren Buffett agrees: “Market forecasters will fill your ear but never fill your wallet.”
So, ignore the noise and move on to the final step…
Step 4: Only check your portfolio once a month
Micromanaging can hurt your investment performance almost as much as the noise can! Believe me, this was a difficult lesson to learn.
But only checking in on your portfolio once a month helps you A) stick to your system, and B) keep your emotions in check by not acting on the noise.
Plus, correctly utilizing stop losses will help to automate the process by protecting you on the downside and locking in gains on the upside!
So, check in once a month (Thaler takes this a step further and says to only check your portfolio once a year!) to update stop losses, buy and sell, and to see where your portfolio is as a whole.
If you can follow these 4 steps, you’ll be able to set yourself up for a nonstop investment income that will last a lifetime…
