Can You Safely Predict Hot Stocks to Invest In
If you can predict the future with accuracy, you will probably be the richest person on earth. Knowing the future will give you advantage over your competitors. For example, there are those who have been accused of insider trading. In a way they were able to predict the future of hot stocks and they either bought or sold their stocks accordingly. In the financial world, knowing something that your competitors are not aware of can help you make important decisions. There are those who consider themselves experts in the financial stock market and they are paid to advice people about hot stocks in which to invest their money. Do they always get in right when they predict hot stocks? You guess is as good as mine.
Can you safely predict hot stocks: Hot stock to buy or not to buy
When you think about hot stocks, you often think that these are the type of stocks you should invest in. Well, there are stocks that are hot and that basically means they are too hot to handle and should be dropped. You've heard the saying "drop it like it's hot" Well, that can also be applied to hot stocks on their way down. That being said, the fact that a stock is no longer hot doesn't mean you should sell or buy. The stock market is frivolous and fluctuation is a good thing. If a stock is so hot that it keeps rising, you will often expect it to level out or bust (remember the early 2000). Hot stocks don't generally mean those with a higher percentage increase. There are hot stocks that are worth investing in if you are in it for the long term. For those who want to make quick cash, or lose quick cash, you will probably be interested in hot stocks that are available today. To buy or not to buy hot stocks will depend on if they stock is negatively hot or not.
Can you safely predict hot stocks: Reading the pattern?
You can predict hot stocks in which to invest if you are very observant. When companies are about to make major decisions, their stocks will either slide or jump. When Apple for example set a date to release a new electronic gadgets, their stock will either jump or slide depending on what the public opinion of the gadget will be. For example, when Apple iPhone started having antenna problems, Apple stocks went down because investors were worried that it could have led to a huge recall. With this example, you can predict hot stocks or trends about hot stocks depending on what is happening to the company and in the world.
Can you safely predict hot stocks: Natural disasters?
Another factor that can help you predict hot stocks is natural disasters. If an earthquake were to shake parts of china where most of electronic components are made, you can expect stocks on the Nasdaq to be hot. These hot stocks will have a lot of investors worried but those who have been in the game for a long time will know what to expect. You do not know when an earthquake will strike but you know what the effect will be.
The same goes for Hurricanes and hot stocks. Those who invest their money in energy companies will be very concerned during hurricane season. That is because hurricanes and natural disasters can impact petrol production and hence push up the price. The Gulf of Mexico is a good example of when can happen and predicting hot stocks during hurricane season can be an interesting game. The same thing can be said about the impact of political conflicts and war on hot stocks
Can you safely predict hot stocks: Remember the BP Oil Spill
When disaster struck on one of BP's oil platform and that in turn became an ecological disaster, you immediately know what was going to happen. You could have easily predicted that BP stocks will become hot but not in a good way. At the early stages of the oil spill, no one knew what was going to happen but some felt it was time to jump off a sinking ship and sell their not so hot stocks. These are obvious example of being able to predict hot stocks. However, things have leveled out for BP and their they are now back in the black and hot stocks is now making investors less worried.
Can you safely predict hot stocks: A bad CEO
When a company is financial difficulties, hot stocks can either make or break the company. When things are not going well in a company, investors will always want a scapegoat because their stocks are no longer hot or their stocks are negatively hot. The situation of the CEO in Eurotunnel or Vivendi Universal is a good example of the CEO getting kicked out in order to reassure investors and hopefully help the company. Often ,when a bad CEO or a CEO that has fallen from grace is removed from the leadership of a company, you can almost predict hot stocks. Replacing a CEO can also make hot stocks slide if investors don't think the new CEO will help improve the company's financial standing. Predicting hot stocks when there is a change of CEO can be a double edge sword. That being said, you will be able to predict that the stocks will be hot in either good or bad way.
Can you safely predict hot stocks: Hot stocks and Gambling
Predicting hot stocks is not rocket science neither should the decision be taken recklessly. At the end of the day you want to be able to make money that is why you are predicting hot stocks. There is no guarantee that you will often make money investing in stocks. Hot stocks or anything to do with stocks is like gambling. You can lose and you can win. Predicting hot stock is not like a biblical prophecy; you will only be following trends and draw logical conclusions hoping you will be able to make some profit. Even expert financial advisers can still find it hard to predict hot stocks. At times they can get it wrong and lose money. If you are planning to invest your money in hot stocks, you need to remember the golden rule of investing in stock market, "Don't invest money you cannot afford to lose" Predicting hot stocks and investing in hot stocks doesn't mean that you will actually make money. It just means that you will have a better chance of not losing your investment.