There is an old saying when it comes to the markets: investors are like sheep. And, just like sheep, most investors follow the herd aimlessly without a real understanding of what’s happening around them. This is also why most investors can’t outperform the market: they’re part of the flock.
Following the crowd almost guarantees that an investor will lose money over the long term. The goal of any investor is actually to step back up on a hill overlooking the flock and watch where the sheep have been and where they’re heading. Be ahead of the crowd, not part of it!
Most investors will make several mistakes in
2012. But, by being a contrarian, you have the possibility of gaining long-term wealth by taking a different stance than the crowd. You must be careful not to just do the opposite of what everyone else is doing; rather, make sure you have a well-researched and thorough understanding of the market landscape to understand where opportunities are.
We’ve analyzed the markets and identified six potential mistakes that investors might make in
2012. Of course this analysis allows people not only to avoid these mistakes and prevent losing money, but it also offers the opportunity to make money.
This analysis will reveal the six opportunities of which the majority of people aren’t aware. By the time the mass public becomes aware of them, these opportunities will already be gone.
Investor Mistake #1: Not Recognizing the Makings of a Classic Bear Market
Trap in Stocks
Following the financial crisis of 2008, the stock market made a bottom in March 2009; since then, it has rallied quite strongly. Some investors are getting too complacent in the rise and are assuming that a new bull market is here. Some analysts on TV might cite a rebound in housing, low interest rates, strong corporate earnings, and other seemingly positive reasons as to