Stock Market Opportunities

How to Identify Investment Opportunities

When it comes to the Stock Market, are you an opportunist? This term need not have a negative connotation. The definition of an opportunist is someone who is dedicated to making money, no matter the consequence or the circumstances of another’s misfortune.
Investing is not about feeling guilty. You may feel compassion for others whose misfortune results in your gains, but there is nothing wrong with taking advantage of opportunities when they present themselves. Here are some tips here for identifying good investment opportunities as they occur.

Study the Economy

Look at global trends. Right now, many countries are experiencing an economic decline the likes of which have not been seen for decades or more. As the economy changes, so do factors such as the real estate market and the stock market. But the reverse is also true; the stock market itself can affect the economy.
You may want to keep an eye on developing countries. Their economies may be growing while more established countries are still in the midst of a rapid decline. Of course, a strong economy means a strong stock market and vice versa.

Opportunities in a Bear Market

Even though a bear market can mean tragedy for a great deal of investments, for the opportunist it can mean money making ability in the near future.

Of course, the most obvious opportunity is to identify a stock that is expected to recover nicely and buy shares cheap (also referred to as bottom fishing). This is not always an easy thing to do, but can you imagine if you had figured out decades ago that Google was going to be as big as it today and invested in it?

Look for an increase in the market’s volume to signal a recovery. As investors start to return to trading, so will prices increase. This could be a good time to sell, but it is rarely a good time to buy.

Often in a bear market, patience is key. The market has to hit an all-time low, and if you’ve invested wisely, then the only thing you can do is to wait it out.

As the Stock Market goes through its various cycles, you will be in the position for making money if you can identify them before other investors and act on opportunities.