Introduction: Market Outlook for 2010
Stock markets are down right now. But 2010 is expected to be the year when stock markets are going to bang again. Many good stocks that have fallen on hard times are expected to recover and regain their lost glory. This is the best buying time. Stock prices are at their historical lows. Investing in stocks right now is expected to give good rewards in 2010.
Choosing an Investment Style: What Suits You Best?
So, what style of investing is better? Buy and hold that may last from 2-5 years,s short-term like day trading or swing trading. Well, it all depends on your personality and style. If you want a lazy man’s way to getting rich, then buy and hold may be the best for you. On the other hand, you are an active person, so day trading and swing trading may have huge rewards for you.
The Challenge: Picking the Right Stocks
There are thousands and thousands of stocks listed on the different stock exchanges in the world. Out of these thousands and thousands of stocks, only a few have the potential of making you rich in 2010. In the US alone, more than 50,000 stocks are listed on different stock exchanges like the NYSE, NASDAQ, AMEX, etc. Start the year 2010byh by identifying the ten best-performing stocks in your opinion. Identification of these best-performing stocks means that you need to study these stocks in detail.
Focus on its price action and how well it matches with the S&P 500 Index. Before you invest in any stock, observe it for at least one week and do not put any money into it unless you probe it thoroughly and feel comfortable with it.
ETFs: The Modern Investment Option
In the past few years, Exchange Traded Funds, or what you call ETFs, have become highly popular. An ETF share can be traded like a stock with no uptick rule that can prevent you from shorting it. In addition to that, an ETF gives you the diversification benefits of a mutual fund with fewer fees as compared to a mutual fund. ETFs are a much superior investment right now as compared to directly investing in stocks or mutual funds.
You can sell a share of a mutual fund until the close of the trading day, whereas you can always buy or sell an ETF share just like a stock. You can think of ETFs as stock indexes, as most of these ETFs have been designed in such a manner as to mimic a stock index or a sector index, or an industry index.
ETFs vs Individual Stocks
Another advantage of ETFs is that they are not as dependent as compared to individual stocks. Individual stocks tend to react violently to breaking news as compared to ETFs.
Micro Cap Stocks vs Micro Cap ETFs
So what are the best stocks to invest in 2010? Should it be a micro cap, a mid cap or a large cap or a growth stock, or a value stock?k. Investing imicrocap stocksks comes with a dream. The dream of picking a micro cap stock that will skyrocket to a mid cap and eventually to a large cap ggivesyou a huge ROI. The rewards can be astronomic, and your percentage gains can be larger than you expected. Though the chances of you picking the rigmicrocap stock are pretty slim!
However, by investing in Micro Cap ETFs, you can reap the rewards with only a few micro-cap stocks soaring and taking the micro-cap index up with them. You can reduce your risk and increase diversification, but lose some of the upside potential with investing in Micro Cap ETFs!There are many different ETFs. In 2010, invest in ETFs and reap the rewards!