Fear is a common feeling for beginners or small investors, especially when entering a market condition that is in an upward trend or bullish in other words. This is a situation where the values of stocks are usually soaring. In some cases, the stocks (with rising values) are limited, that’s why competition occurs between big investors.
With that given situation, beginners and small investors are usually being left behind by the big and rich individuals. They cannot go along in the front line because of many factors such as fear of losing. However, worry no more because I got your back! To help you out in thriving in a bullish trading market, here are some pro-level tips that can help you.
#1 Buy put options.
Bad things could interrupt the very good scenario in a bullish trading market. That is why it is highly recommended for beginners and small investors to invest a small amount in put options. Put options are low cost but require a long time in understanding its concept. However, although it is difficult, rest assured that you are well protected from the risks.
#2 Stick to your financial plan.
One question that you will encounter before entering a bullish market is how much should be allocated to your equities, gold, liquid assets, among others. If you have your financial plan with you, the struggle in solving that problem would not be a hindrance. If the allocation is looking not in a steady line, then adjust or go back to the original. Lastly, the benefit of sticking to your financial plan opens you to great opportunities such as enough liquidity to use when cheaper options are available and booking profits at a higher valuation.
#3 Side with the momentum.
Big investors are aware that a bull market is not unidirectional. That is why beginners and small investors should not risk going in the opposite direction of the momentum. Never outwit the market or by selling stocks against the so-called momentum. Because chances are very high that you will lose in the end – and it is regretful. Moreover, remember that a bull market also matures. If this happens, only those companies with high market valuations will be rewarded. Therefore, not sticking with a quality equity portfolio is a stupid choice for beginners and small investors.
#4 Never trust too good things.
There is no such thing as very, very good in the world of the stock market. Because there is high volatility in this industry and too good things are dubious. For example, in a bullish trading market scenario, if the intervals in taking profits are so sound, then there might be something wrong. Therefore, a safe strategy for beginners and small investors here is to stay at regular intervals.
Indeed, beginners and small investors are usually closer to risk compared to those veteran and big investors. However, with these pro bullish market tips, they can now go against the giants of the industry.