There's nothing wrong with that. For better or worse, industry consolidation is an unavoidable consequence of free-market enterprise. And it doesn't only happen once. As an industry matures, it will go through several consolidation phases until only a small number of competitors remain. That's what happened in the automobile manufacturing sector during the 20th century, and what appears to be happening in the retail sector now. Just as Ford (NYSE: F), General Motors (NYSE: GM), and Chrysler (NYSE: FCAU) came to dominate the automobile sector, perhaps Amazon, Target, and Walmart (NYSE: WMT) will be the only three American retailers left by the end of this century. Even if that doesn't happen, more consolidation in the retail sector is inevitable. As that occurs, there will be numerous opportunities for investors to cash in. The Best of Both Worlds As happy as I am with my profit in Target, I know I could have done a lot better. Recently, my colleague Scott Chan explained how using long-term call options, or "LEAPs," can amplify your investment results. The 145% gain I achieved over two years by owning Target stock could have been accomplished in a single week had I owned a call option on TGT. Actually, if I had bought a LEAP on Target a year ago, my return would be much greater than that. Of course, as the old saying goes hindsight is 20/20. I could have just as easily lost money if Target had been unsuccessful in fending off Amazon. For that reason, a prudent investment strategy would include a safety net that limits losses on unprofitable trades. I'm okay with owning an underperformer like Walgreens provided it doesn't ruin the performance of my overall portfolio. There are several ways to accomplish that, the simplest of which is using stop orders to sell you out of a stock if its price drops too low. That method works well if you are only trying to make money when the price of a stock goes up. What you may not know is that there is a way to make money on a stock even if its price does not rise. Even better, you can limit the amount of risk you are taking to precisely whatever level is suitable to you. Already, my colleague Jim Fink has booked gains of 66%, 36%, and 61% this year using such a method. In fact, Jim has closed 26 trades like that this year, every single one of them for a profit! Jim Fink is chief investment strategist of the elite trading services Options For Income, Velocity Trader, and Jim Fink's Inner Circle. He has agreed to show 500 smart investors how his "paragon" trading system could help them earn 2,500% in just one year. Paragon is a proprietary program created by Jim after years of trial-and-error. Jim's system generates trades that statistically guarantee you can turn small stock movements into winners that are up to 18 times better than what a traditional buy-and-hold investor would see. Our team has put together a presentation to explain how you can profit from Paragon. Click here to watch. |
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