Making Money in 2019 Equity Markets

Money is made in the equity capital markets by embracing a strategy and not deviating from it.  Discipline.  In contrast, every month in the equity markets is different.  October 2018 was an avalanche, November 2018 was a plateau, December was a landslide; and January 2019 has been an up trending market.  As companies are now reporting 4th quarter and year end operating results, some companies are reporting great operating results and still others disappointing.  So with markets changing and mixed signals in the economy and globally, political upheaval and mixed results, what do we do?

One’s successful investment strategy should always be maintained.  Only tactics should vary.  Case in point:  Suppose our overall investment strategy is that:  1.  we select securities that do not correlate to the broad markets and; 2.  All securities selected (long positions) must possess a high return-risk profile (meaning upside has geometric potential compared to downside).  We can maintain this strategy during any market conditions.  However, we must constantly adjust our tactics as market conditions [market behavior] change.  This means adjusting the universe of securities for consideration, by many factors, including but not limited to: capitalization tier (e.g. $300 million market cap securities vs. $2 Billion): sector (i.e. gaming and mobile banking vs. retail); liquidity profile; social sentiment (yes social sentiment) and investment community visibility.  Accordingly one can maintain one’s Investment Strategy, while varying Tactics (quantitative and qualitative) to achieve  investment success.

Until Next Week…

By |2019-01-30T15:20:37+00:00January 30th, 2019|blog|0 Comments