How To Find The Best Stocks in 2021!

Learn what you need to do to find the best stocks to invest in 2021.

Zaheer Anwari

January 27th, 2021

Each Year There Are Long-Term Trends Waiting To be Caught

There are 2 steps to a portfolio that performs consistently well.

Step 1 - Selecting the very best high-probability assets that have more chance of returning a profit than a loss. 

Step 2 - Extracting profit SAFELY for the lifetime that the asset is ‘in trend’. We will look at what ‘in trend’ means in the next section. 

There is often a level of sophistication to good investing that is underestimated as people go in search of the false promises of quick riches and why so many fall short. The reality is that the best techniques are simple to learn to execute but growing broker accounts consistently year in year out is not easy. It is the simplicity of good investing as well as the patience, resilience and consistency needed to extract profit that catches a lot of people out.

Click HERE To See Which Stock Won In 2020!

Let’s look at what trends are in more detail.

Long-Term Trends Are A Simple Source Of Profits

The natural movement to price action dictates that it only moves in 3 ways.

Price moves up, it moves down or it moves sideways. 

The 2 most profitable environments are when price moves up or down and this is when an asset or asset class is ‘in trend’. 

When an asset moves up, it is in a bull trend and this is when we buy or ‘go long’ to make money.

When an asset moves down, it is in a bear trend and when we sell or ‘go short’ to make money. (Shorting is often a foreign concept to many. We cover it in more detail in our Launchpad academy.)

When an asset moves sideways, this is when we stand aside from taking any positions on this asset and move to another assert that is in trend. Trading sideways markets is one of the key reasons people lose a lot of money.

The longer the market is in trend, the more profit we can make and accumulate. Stocks and commodities can typically trend for 18 months to 24 months. Currencies typically 9 months to 12 months. How do we identify when an asset is in trend? The best method for us as busy everyday professionals and business owners is to use technical analysis.

This is a flashy name for using charts to make our decisions. The best timeframes to do our analysis on are the higher timeframes. Here at Sublime Trading, we do our analysis on the monthly, weekly and the daily timeframes. If we want to hold our positions for months, then we need the timeframes to allow us to do that. 

The mistakes that many make is to trade off the lower timeframes such as the 5 minute or 1-hour timeframes and this is where money is lost opening and closing multiple positions on a daily basis. 

The less you trade and instead the more you hold and compound, which is simply adding more of a winning asset into the portfolio, the more you make and all done without compromising your current lifestyle or being glued to a computer screen. 

You want to make as much money as possible as safely as possible without giving up on your life to achieve that. The modern investment space and the tech age we live in very much affords us to do that. Let’s revisit and expand on Part 1 and Part 2 mentioned at the very start.

Scanners Find Stocks That Beat The Index

Step 1 - Selecting the very best high-probability assets that have more chance of returning a profit than a loss.

There are over 10,000 investable assets across stocks, commodities and currencies. Manually going through them is an impossible task. What people then do is to seek out ill-informed opinions on what assets to invest in as a shortcut to finding stocks for the portfolio.

This is a disastrous approach and a one-way ticket to blown accounts and soul destroying losses. One of the first rules of good investing is to ignore opinions including your own. If you are continuously adding the wrong low-probability high-risk assets into the portfolio, you will always struggle for consistency and results. 

The correct approach is to invest in scanners and programme them with a proven ‘edge’ to bring a list of over 10,000 assets to a more manageable list of say 50 to 300 at the click of a button. The next stage is to then manually go through the results of the scan to find the best 5 to 10 assets for the portfolio. This process is then repeated on a daily and weekly basis at the end of each trading day.

Now before you go off and start subscribing to professional scanners which will cost you a pretty penny on an annual basis, you can subscribe to our newsletter which will save you £1000s annually and showcases the best-performing stocks, many of which make it into our personal portfolio and into the signal service we provide for our Phoenix members. 

The best process for finding assets that have the highest chance of returning a profit is through a combination of technology and human discretion. NEVER rely on a 100% automated service such as a black system as this is not robust enough to deal with the organic nature of the markets consistently. You are!

Once we know what assets we want to enter into the portfolio, we then move onto step 2.

A Robust Simple-To-Execute Strategy Handsomely Does The Job

Step 2 - Extracting profit SAFELY for the lifetime that the asset is ‘in trend’. We will look at what ‘in trend’ means in the next section. Once you have identified what assets to enter into the portfolio, the next stage is to extract profit safely for the lifetime the asset is in trend.

This is where a proven trend-following strategy comes in. How long the asset trends is down to the forces of the market is beyond our control. We just want to ensure we are positioned correctly to maximise what the market is giving us whilst simultaneously protecting our capital and downside.

The hallmark of a good investor is to always protect our hard-earned money and to let the profit come to us. The reason why so many lose so much money is that they focus on the profit first, risking anything and everything to achieve it and eventually losing it all. For each and every investment, the following aspects must be PRE-THOUGHT out:

• The entry point

• The initial stop-loss

• The allocated risk

• The compound levels

• Th exit management 

These are all within our control and hence where our focus must always be. What is not in our control are:

• The outcome of the investment - if it is a winner or a loser

• How long the asset will trend for - it could fail or trend for years

So by focusing on what is in our control, which is the scanning and analysis process and the pre-thought out criteria for each investment covered above, we can continuously establish environments that have more chance of making us a profit than a loss and over the long-term, see large life-changing compounded growth. 

To fast track your learning, have a watch of our free 4-part series which elaborates on the concepts covered in this blog and which also tells you more about our Apprentice and Phoenix academies. This is how good investing is done.

In this data race, you will find the best-performing stocks for 2020 as picked out by our scanners and analysis process and that has made it into our portfolio. These are stocks that we have also shared with our Phoenix members through the signal service to be added into their own portfolios, stocks which are still open today months after being first added to the portfolio.