Any Tips on How to Get the Highest Returns Within 4 Months by Investing in Stocks?
I recently signed up for an investing competition at my school. The competition grants each competitor ,000,000.00 (of virtual money), where we will be able to buy/sell any stock listed on the AMEX, NASDAQ, NYSE & OTC-BB. The competition lasts 4 months (starting December 7th), and the competitor with the highest returns by April 1st, 2016, wins.
Now, I consider myself a value investor (I have read the Intelligent Investor by Benjamin Graham, and I am a big fan of Warren Buffett). However, it seems to me that value investing is only appropriate for long term investing (i.e., 10 years or more). So, I am thinking that I am going to have to be using some other form of investing, and, unfortunately, I am not quite familiar with any other methods.
Does anyone have any suggestions/methods on how to get the highest return possible within 4 months by investing in stocks on the AMEX, NASDAQ, NYSE & OTC-BB?
(Just so you know, first place wins 00, second wins 00, and third is 0. Also, orders can be placed both long and short, but no leverage or options trading will be allowed.)
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Invest in an etf called SPXS and hope for a market correction in the next month. Or if you know a lot about markets and trends, select from this list of leveraged etfs available from Direxion.
Try using technical analysis, look at the charts and look for stocks that are uptrending. The dfinition of an uptrend being higher highs and higher lows.
Use a stochastic indicator and buy on the dips down when the stochastic is in the oversold position (below 20) and and crossing over about to turn back upwards.
Or you can also use the stochastic to trade shares that have been ranging between two prices (say between and ) for a while. As the price approaches the support and the stochastic is in oversold, you would buy as the price rebounds off the support and the stochastic crosses and starts rebounding back up. As the price starts reaching the resistance at (with stocastic in overbought at above 80) you would look to sell and take profits. If you were able to do short selling in the competition, you could short sell at this point in time and make profits on the way up as well as on the way down.
There are many more techniques you could use to set up trade opportunities using technical analysis, so it may be a subject you could research further before the comptition begins. Good luck.
What you're asking for is a short-term, large return investment. When looking for big returns in a short period of time, risk is inevitable. The more risk you are willing to assume, the higher your potential returns.
Of course, the flip is is that the higher your risk, the higher the potential to lose all your money!
Since this is an exercise for school (and not real money and not your life savings) your best bet is to "go big or go home". You can safely assume 100% risk!
Don't look for value stocks, dividend stocks, or anything that pays a steady return over a long period of time. Instead, look for something risky that has the potential of going up, up, up in the next few months. Are you allowed to trade options in your fake portfolio? Options can have big risk and big reward potential. Penny stocks are super volatile, too. Do some research, look for a fad.
In other words, you will most likely lose it all. But you get a little lucky, you could win this thing outright by making some risky investments. A 5% chance of winning 00 vs 95% of going broke may be pretty good odds if everyone else is value investing for just a few months. You will need to get lucky.
Go big or go home!
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