Beating the market is harder than it looks


Beating the market is something that is not impossible but hardly done consistently over time. This is because the stock market is like a giant competition that pulls together some of the best competitors in the world. It may look easy at first, but to do it over the long-term is something that requires skill, work, dedication and lots of experience. To start you have to define your strategy. Choose a strategy that has consistently worked over the past decades. One of the best ways to do well in the stock market is value investing. Records show that value investing is not dead, and it has been among the best strategies to use, as it allows for better returns.

How to start value investing

Perhaps the first step to take before you start value investing, is to determine how you will find those value stocks. Investing in the stock market is all about finding undervalued stocks. This is where most of the money can be made. Choosing the right companies and analyzing them is the key to great stock selection. Start by looking at companies you already know and are familiar with. These are the best companies to start with because you already have some kind of knowledge and insight on them. After you go through most of the companies you know, it is now time to look into unknown companies.

Look at unknown stocks

Most investors are used to looking at very well known companies that they are familiar with. This makes them feel safer and more confident in their investment. Although it might be better to start with well known companies, it is certainly not the best way to invest. Look at Amazon for instance, the company was barely known in the 90’s and today it is among the largest companies on the planet. If you had a choice, of course you would want to invest in a company like Amazon, before they become such a large company. These are the kind of companies that can give you amazing returns over the years. You don’t have to choose 10 stocks like Amazon, you just need to find a company that will have half of Amazon’s performance over the long-term.

As you see there are countless ways to conduct your search for stocks, and to beat the market. Not everyone uses exactly the same approach, and a certain strategy is no guarantee of profit.