How Whale Works: Mastering Long-Term Stock Market Investing
Unleashing the Power of Long-Term Stock Market Investing with Whale
Long-term stock market investing can be intimidating, but with the right approach and tools, it can lead to financial success. Whale, a robust investment tool, simplifies the process and helps investors maximize returns. In this detailed guide, we’ll explore the best ways to utilize Whale for long-term stock market investing success. Let’s dive in!
Step 1: Determining Your Initial Investment Capital
Finding the Right Capital Amount for Long-term Success
As a long-term investor, it’s essential to choose the right starting capital. The magic of compound interest ensures that, over time, even small investments can grow substantially. When determining your initial investment, ask yourself, “Will I need this money for the next three years?” If the answer is yes, reevaluate your capital amount. Remember, you can always add to your capital through future savings.
Step 2: Reviewing Your Smart Portfolio
Selecting the Best Companies for Long-term Growth
Whale focuses on the top 1% of businesses with solid financials, ensuring your portfolio consists of only high-quality companies. These companies are selected based on their potential upside, meaning their current price is below their fair value. When adding a company to your portfolio, ask yourself, “Am I willing to commit to this company for at least three years?” A minimum of 15 and a maximum of 25 companies should be in your portfolio, depending on your capital amount. This diversification reduces your drawdown risk per company to a maximum of 6%.
Step 3: Monitoring Whale Alerts
Staying Updated on Buy/Sell Opportunities
Whale aims to make investing as easy as possible, sending alerts only when actionable items are available. These alerts will notify you of buy/sell opportunities for your selected companies. Although you may not receive alerts immediately or frequently, trust in Whale’s ability to identify the best buy/sell points based on market price activity. Alerts will indicate the ideal price and budget allocation for each opportunity. Execute orders in your brokerage account as recommended, keeping in mind that slight price variations won’t significantly impact long-term returns.
Step 4: Maintaining a Calm Investment Approach
Managing Your Psychology for Long-term Success
Successful long-term stock market investing requires psychological discipline. Temporary negative returns in your portfolio may cause anxiety, but it’s crucial to remain calm and avoid panic-selling. Remember, Whale’s strategy accounts for temporary downturns, and the stock market has never experienced negative returns for a consecutive five-year period. Embrace patience, and you’ll reap the rewards in the long run.
Achieving Long-Term Stock Market Investing Success with Whale
By following these steps and utilizing Whale’s powerful investment tools, you’ll be well on your way to long-term stock market investing success. Remember to carefully select your initial capital, build a diverse portfolio of high-quality companies, monitor Whale alerts for buy/sell opportunities, and maintain a calm investment approach. With patience and perseverance, you can achieve your financial goals.
Understand that your starting capital doesn't really matter to profit from the stock market; as long as you're in it for the long term, you are guaranteed to make profits. (a.k.a magic of compound interest)
When deciding on your initial capital to invest, the question that should be asked is this; ''Will I need this money for the next three years?'' If your answer is yes, then reevaluate the capital amount until your answer is no.
In other words, start with a capital amount you know you won't need to withdraw for a long time. Also, remember that you can always contribute more to your capital via savings in the future.
Whale tracks only the top 1% of the great businesses with solid company financials,
Since they're all great businesses, your portfolio is determined based on their current potential upside. Potential upside means the company's current price is below its fair value.
Long-term thinking applies in the company selection process as well. Ask yourself this ''Am I willing to commit to this company for a minimum of 3 years as a shareholder?'' Your answer should be yes if you decide to buy the stocks of the business.
Whale prepares a portfolio with minimum of 15 and a maximum of 25 companies depending on your capital amount. This means your draw-down risk per company will be a maximum of %6 or less at any given time, which is pretty conservative.
Whale aims to make profitable investing as easy as possible.
Therefore you will only hear from Whale when there is an actionable item to attend to. This means Whale will only alert you when there is a buy/sell opportunity for the companies you selected.
You may not receive an alert right away or frequently at times. You should not worry and be patient. After all, Whale is seeking the best buy or sell point for you, and it is entirely dependent on market price activity.
An alert will basically tell you two things;
- The price is near a good buy/sell point
- The budget you should allocate
So it should sound like this; ''Buy Apple stocks at $126, and spend $1260 max. ''
Once you receive the alert, proceed to your brokerage account to execute the order. By the time you receive the alert or at the time of the execution, the price may not be strictly at $126; as long as it's near, proceed to execute. Remember, in long-term investing, you only need to give it time, so slight price differences don't make much difference in the long run.
You can then save your executed price and budget to Whale or keep it as it is if executed price and budget are the same as recommended. This way, Whale will be informed and continue calculating your next steps.
The most crucial part of successful investing is managing your psychology.
Sometimes, one or more company prices drop, and your portfolio may show negative returns temporarily. Never panic, and sell. During times like this, you must keep calm and remember that the Whale strategy covers this possibility, and short-term prices are irrelevant to your long-term goals.
The fact is that there has never been a consecutive 5-year period in the stock market's history where market returns were negative. And those who can stomach the temporary downfalls will profit the most in the long run. That's just how the stock market works!
