If You Want to Make Money in These Stocks, Ignore the Noise

Publisher’s Note: Markets and Money this week will come from Sam Volkering. Sam also writes, analyses, and recommends stocks for small-cap advisory, Australian Small-Cap Investigator. Today’s Markets and Money is adapted from Sam’s weekly update to his small-cap subscribers on 9 June. Enjoy.

In the last three months, the ASX All Ordinaries are down 6.17%.

Normally I wouldn’t give two hoots about what the ‘All Ords’ are doing. I say this because the main companies that make up the All Ords aren’t interesting for a small-cap publication.

However, the All Ords and the ASX’s biggest companies do hold a fair bit of sway when it comes to the general sentiment and movement of the overall market.

I’ve explained before that of the total $1.5 trillion market cap of the ASX, the top 100 companies account for around $1.4 trillion. That’s about 93% of the ASX in just 100 companies, of a total 2,177. That means there are 2,077 companies that account for the remaining 7% of the market.

That makes it an embarrassment of riches when it comes to picking small-cap stocks on the ASX. And it makes it pretty exciting too…

When the market falls by over 6% in a few months you can bet your bottom dollar it’s all over the news. Here’s just one of the headlines, from the Sydney Morning Herald: ‘$40 billion wipe-out in the ASX’s biggest rout in two years.’

Now that’s got to have an impact on the confidence of shareholders. And I’m not just talking about shareholders of your typical blue chip stocks. When you’re bombarded with negative press and you continue to see the market nosedive, it’s hard not to get caught up in it all.

It’s like a car crash. You end up rubbernecking whether you like it or not. Sometimes when the weather is stormy it’s just best to rug up and wait out the storm. Sometimes you should just turn off the news for a day or two; it’ll do you a world of good.

That doesn’t mean you have to ignore your investments. But don’t follow the herd and look for an exit because you heard someone say ‘impending doom’ at a BBQ. There’s every chance they were just talking about Carlton’s hopes of getting good any time soon!

When you have a strategy, stick to it. Have conviction and back yourself. When you’re investing in small-cap stocks, it’s imperative to ignore the noise and stick to your guns.

If you have a five year horizon and you’re a year into it, don’t get shaky knees. And when it comes to the stocks in the Australian Small-Cap Investigator portfolio know this: if there’s a stock I don’t think is going to make it, you’ll hear about it from me.

It doesn’t matter how much I personally like the stock, if we need to sell, we’ll sell.

The last week has been a minor hiccup for the whole of the ASX. It’s driven by a bit of fear and a mixed bag of economic figures. The old self-fulfilling prophecy rears its ugly head and stocks see a sell off. Of course, not all stocks were down, and that’s possibly the whole point here.

If you listen to and follow the general herd then you’ll always end up like the masses. But if you sit on the fringe a bit — and you clearly do if you’re investing in small-caps — then you need to have an extra pluck of courage from time to time.

Focus on your strategy and the stocks that you own. Have conviction and, please, don’t try to invest based on what you hear on the news.


Sam Volkering,
Editor, Australian Small-Cap Investigator

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Sam Volkering is contributing Editor for Markets & Money. He’s also Editor at Money Morning, where he’s the in-house small-cap, tech and cryptocurrency expert. Sam has had a varied a career in economics, finance and financial advice. He’s advised high net-worth individuals on how to invest their wealth and how to best navigate the turmoil-ridden world we live in. After tapping out of the financial planning world, Sam decided to join us and dedicate his working life to finding the most life-changing investment opportunities that exist in the world today. Today he travels the world speaking to and grilling the who’s-who of the investment world. He spends every waking hour uncovering the latest microcap and small-cap stocks, the most revolutionary technologies and the next big opportunities in cryptocurrencies. If you’d like to learn about the specific investments Sam is recommending, you can take a 30-day trial of his small-cap investment advisory Australian Small-Cap Investigator here or a 30-day trial of his industry leading cryptocurrency service, Sam Volkering’s Secret Crypto Network, here. But if that’s not enough, Sam also hunts down revolutionary technology companies. He recommends the best ones he finds in his breakthrough technology investment service, Revolutionary Tech Investor. If the best companies exist in Australia, Sam will find them. If they’re in Silicon Valley, Frankfurt or Tokyo, Sam will find them there too. To find out more about how Revolutionary Tech Investor can help you profit from world-changing opportunities, click here to take a 30-day no-obligation trial today. Websites and financial e-letters Sam writes for: Money Morning Australian Small-Cap Investigator Sam Volkering’s Secret Crypto Network Revolutionary Tech Investor Microcap Trader

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