THE STOCK MARKET IS A BATTLEFIELD

Have we all heard of investors who made it big, accumulated tons of wealth and lead a luxurious lifestyle?

Have we all also heard of stories about investors who lost a lot in the stock market and even went bankrupt?

If your answer to the above 2 questions are a resounding "Yes",

YOU ARE RIGHT!

The stock market has both people who earn and lose from it.

But why are those successful ones so rich and wealthy?

The answer is because the stock market is a...

ZERO SUM GAME

For every person who made money in the stock market, someone else will be losing and have to pay for the winner!

Statistics show that ~90% of investors lose money in the market mainly because of psychological factors, risk and money management inability.

With 90 investors losing money in the market, it is no mystery that the remaining 10 investors will be able to accumulate MASSIVE WEALTH.

As all of us invest in the stock market one way or another, we are inevitably entering a BATTLEFIELD or some may call it a WAR ZONE.

Either you hunt, or you get hunted (Hence The Growth HUNTER... Just kidding, we are not hunting for others in the stock market. We are just hunting for SUPERGROWTH stocks.)

To be the 10 investors who are profitable and remain in the battlefield,

you have to first understand the 4 STAGES OF THE STOCK MARKET.

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Source: TDAmeritrade Strategy Desk

1. Accumulation

2. Mark-Up

3. Distribution

4. Mark-Down

It may be a little difficult to understand the above image for some, hence let us use the below picture for explanation.

1. STEALTH PHASE: Those with better access to certain information and the capacity to understand the wider economic context would start ACCUMULATING (Stage 1) the stock while it is cheap.

The prices will gradually increase, but they often go unnoticed by the mass like you and us.

2. AWARENESS PHASE: The institutional investors may also start to notice the momentum and start to acquire this stock, pushing the price higher.

However, there could be a first sell off as some early investors take their profits.

Yet, that is also where the smart money and institutional investors purchase even more.

Sooner or later, the media starts to post with positive reports and rave about the industry or the company. That's where we get the LIFT OFF and start going into the MARK-UP (Stage 2)

3. MANIA PHASE: The mass (regular investors like you and us) starts to notice that prices are moving up and starts to hop onto this boat that promises an “investment opportunity of a lifetime”.

Everyone has this expectation that the price will be a "definite" appreciation because of all the fantastic stories about the economy, industry and company.

The higher the price climbs, the more investors put their money to bet on it.

However, what the mass do not realise is that towards the later part of the Mania Phase, those who bought in Stage 1 and 2 are quietly selling their stocks to them and slowly getting out of the stock.

This is DISTRIBUTION (Stage 3) of their LARGE positions. They have to sell it over a period of time to be discreet so that they can sell at better prices and will not alarm the mass about their exit.

4. BLOW OFF PHASE:The market will eventually become exuberant as the regular “investors” sees their huge paper profits in their account and greed sets in.

You could even be purchasing more of the stock because of the "glorious future" you were told!

All of a sudden, a trigger was pulled and bad news about the company or industry sets in.

The regular "investors" realise that the situation has now changed and are all rushing for the exit.

A MARK-DOWN (Stage 4) starts.

Some regular "investors" may still be in denial that price is cheap and purchase more at the down phase thinking it will go back to "normal".

However, you could be tricked into it and it turns out to be a "bull trap".

Once the stock price drops below your newly acquired price, you will be in fear and start to panic sell.

The stock price will start to drop swiftly and those who remain in it will be in MASSIVE LOSSES. For those who leveraged (borrowed money to purchase), they will be in debt and possibly declare bankrupt.

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Does the above sound familiar?

If it does, we hope the above explanation allowed you to appreciate the dynamics of the market better and make your next investment a better choice.

How do we make money and become profitable then?

It is to track the smart money and institutions, be on the same side as them.

This happens to be at the end of Stage 1 and beginning of Stage 2.

Once the media and the mass come in, they will be the tail wind that will propel your stock up tremendously.

And that's how you TRIUMPH in the battlefield and accumulate MASSIVE WEALTH from the market folks!

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