subject: Trading Strategies - Smart Investors Always Have A Plan [print this page] After economic upheaval and catastrophe struck the credit, housing and banking markets over the past few years, many people are simply trying to get their finances back on track, and find a way to recoup the losses that were suffered because of unscrupulous lenders or stock brokers. Even though the market is far from stable, it has recovered somewhat, and many people are looking to make cautious investments in an effort to start rebuilding what was lost. If you're going to be successful in the stock market, it's important to be willing to take control of your own portfolio and put reliable trading strategies to work for your benefit.
The most important thing to realize while searching for trading strategies that will help you to be smarter and more successful in the stock market is that there are no one size fits all investors solutions for the stock market. Even though there are thousands of so-called market gurus on the internet, all claiming that they've discovered the fail-proof way for you to turn a thousand dollars into a million dollars, they are almost always pushing a plan that is more likely to fail than to succeed.
In today's modern market, it might surprise you to learn that one of the soundest trading strategies was invented way back in the early 1930's. Developed by two professors at Columbia University, Benjamin Graham and David Dodd, this trading strategy is very simple and easy to comprehend for most beginner investors. Known as value investing, this strategy says that investors should look for companies currently trading below their actual worth and purchase their stock. Value investing assumes that eventually, the market will correct the low valuation, and the stock owners will be able to earn a profit. This might take some time, however, so this strategy is generally not used by short term or day traders.
Those that are interested in trading strategies that will allow them to earn money as fast as possible will be attracted to a different concept, income investing. This strategy is also very straight forward, but involves a bit more risk. Designed to help you pick companies that will provide a steady stream of income, right from the start, income investing is focused on older, more established companies, which have reached a certain size and ceased to grow. Because these companies are focused on income and not expansion, they are more likely to pay out attractive dividends to their investors.
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