Mastering the Stock Market: High Probability Market Timing and Stock Selection Tools

CHAPTER 1

Stock Indexes and Sectors

For those picking up this book who have little to no experience in the markets, I'll start off by welcoming you to the world of trading and investing. One of the greatest achievements for the human mind and psyche is to identify a business opportunity and then profit by taking decisive action.

Let me start off by addressing the newcomer or novice investor. I am not going to scare you away with heavy technical stuff, at least not now because that will come later. For the advanced trader, there are quite a few golden nuggets of trading concepts packed in these pages.

I want to share with you a story about my next-door neighbors' experience. These are awesome people. The husband is retired; the wife works as a travel agent in a North Shore suburb of Chicago. As the world was facing the financial crisis back in early 2009, the wife came over to our yard while I was surveying the garden. She knew that I worked in the financial markets, but had no idea exactly what I did. In the past, she had seen me on CNBC commenting on gold or crude oil and wanted my opinion on what to do. She had a feeling that stocks were too cheap and that there might be something she should get in on. She was right; stocks were cheap in March and April 2009.

She explained that they hadn't invested in stocks since the tech wreck of 2000, but they had some money and wanted some advice. I had her come over the next week for a lesson. All we did was go over some companies and get ...