Value + Momentum Strategy
One of the most important thing to muster if you wanna make money in the stock markets, is "the stock market is NOT the economy". It is a forecasting machine. If you keep watching mainstream news, you will invest only when the news is good.
There are two styles of investing. 1) buy when stock prices / indices are sufficiently cheap so that you have a margin of safety. There is a whole lot of literature on this. Some use purely quantitative methods, e.g. debt asset ratio, PE. Some use qualitative as well, e.g. wide moats, integrity of management. This is Warren Buffett's style. But remember you need patience to reap the benefits because cheap can get cheaper. Expensive can get even more so.
Second style is to use Value + Momentum. Something is cheap, but you won't buy it because sentiments are poor. Instead you wait for a trend in your favour, just like a wind surfer. She doesn't question "why the wind must blow this way". She merely surfs along the wind.
There are people who analyse and read the news, tell me that surely the markets cannot rise when the economy is going to be worse than the Great Depression. But it is what it is. If a rebound is underway and is up 25% from the bottom, against the backdrop of increasingly negative news, who am I to argue? I just go with the flow.
Every wave of liquidity, as long as it is more than 15% return, is worth riding on in my opinion. That is my "Tao of investing". For all you know, stock markets may crash again. The truth is, nobody knows. You either decide to buy when it's cheap and be prepared that it may fall further, or you take profit on whatever you have bought recently.
If you have no time, have an active work life / social life, it is better to either adopt method 1, or just leave to a good fund manager to help you manage.
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