Simple strategy best for returns

Published in the Geelong Advertiser, September 2013 by Dale Gillham

K.I.S.S. – no I’m not talking about the physical action nor am I a big fan of the rock band of the same name. Yet these four letters have a very important place when it comes to learning how to trade or invest successfully. If you guessed Keep-It-Simple-Stupid, you’re close however my interpretation of this four letter acronym is Keep-It-Simple-Smart, let me explain.

You see the most successful traders I know and what I teach through my share trading education programs at Wealth Within is to keep everything simple. Those that have the simplest trading plans are more likely to be profitable because it’s far easier to implement and follow a basic system rather than something that is complex and hard to grasp. Following a simple, profitable system is the smart thing to do and it’s the quickest way to grow your wealth. However even with this knowledge I still see so many people new to trading and investing make the mistake of thinking becoming profitable is a position reserved for Wall Street geniuses.

Why is this? I believe it’s largely due to the financial industry at large promoting for many years that a retail investor’s money is safer and more profitable under their seemingly professional watch. The GFC however has made many people wise to the fact that this is simply not the case. No one cares about your wealth more than you so take a step in the right direction toward wealth creation by investing in a solid financial education and follow the KISS principle.  

So what do we expect in the market?

Last week the market continued its bullish run up. Largely this was due to the Federal Reserve announcing the monetary stimulus program or QE3 would remain unchanged for the foreseeable future as the US economy remains weak. Given the supportive nature of this program to both the US economy and rise in asset values, investors have piled back into the markets on increased confidence.

The All Ordinaries is now closing in on the top of my target band at 5400 points. If the current strength of the rise continues, the more confident I become that the market top I have discussed over the last several weeks is likely to form in the first half of 2014 rather than the last quarter of 2013. In other words I am growing more confident that the current market momentum will continue and the next major pull back won’t occur for some time yet. This leaves the door open to further investment opportunities for wise investors.

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