Riding the Ripples

When you think about putting your money into the stock market, what’s the first thing that pops into your head? Do you wonder if you know enough about the market to do so? Are you fearful that you might lose the shirt off your back? Perhaps you already have money in stocks, either held directly or through mutual funds...but are you happy with the way your money is growing?  How long do you plan to keep your money in the stock market? What would prompt you to take your cash and flee?

Americans have an interesting relationship with the market, one fraught with a combination of fear, admiration, and, even at times, loathing. Some people revel in the profits made in the late 1990s. Others feel burned at losses after the bubble burst in 2000. Still others look back in history and feel anxious about market crashes, such as the one in 1987, or the great crash of 1929. 

Whatever your feelings about the market, contrarian ripple trading is a method that can work for just about everyone. Contrarian ripple trading involves the short-term buying and selling of large capitalization stocks using contrarian principles to ensure that purchases are made when stocks are “on sale” meaning at relatively inexpensive levels. Subsequent sales of the stocks involve an aggressive taking of profits as soon as they occur. As most stocks fluctuate in price, with a day in day out ripple effect, the contrarian purchase and immediately profitable sale can often be repeated over and over again in the very same stocks. We call this riding the ripples! 

We are not day traders

Let’s face it, most of us are saving up for something big – a house, retirement, our children’s college tuition – goals that require years of careful planning and saving. Experts usually advise us to invest our money in the stock market over the long haul, usually using investment vehicles such as employer-sponsored tax-deferred 401K or defined contribution retirement plans which encourage long-term investing. 

We ourselves believe that there is a great deal of logic in the long-term buy and hold approach. After all, historically the market has proceeded in a generally upward direction even if it has experienced some reversals along the way. We definitely advocate having long-term investments in your portfolio, particularly those that are tax-deferred. We have 401K plans and 529 College Savings plans for our children’s education. 

However, at the same time for some of your discretionary savings, Contrarian Ripple Trading could work for you in the same way it has worked for us – providing risk-averse but consistent market-beating returns. 

Risk-averse short-term stock market trading? Isn’t that a contradiction in terms? Market-beating returns? With all those brokerage commissions that you will be paying and Uncle Sam burying you in capital gains taxes? What have these people been smoking, do we hear you say? The idea that you can earn what certainly for us has been the equivalent of an extra household income may sound suspect to many. Isn’t this just day trading, you may ask? And we all know that day trading is a losers’ game. Anyway, who has the time available to spend their entire day sitting in front of the computer with sweat dripping from their brow and their index finger hovering over the mouse ready to pounce on a stock – agonizing over whether to buy or sell. This sounds like a gambling addiction. Do you really want to bet the future of the family, the kids’ education, your marriage, on some flight of fancy that you can possibly compete with Wall Street and win? 

Nothing can be further from the truth

In order to practice our short-term trading method successfully, you don't need to sit and stare at a computer screen all day. Neither should you have to spend sleepless nights worrying that you might end up penniless.

Rather, with a relatively small amount of application in terms of time – that is, you don’t need to give up your day job – you too can make an extra income using the combined power of contrarian thinking and the natural ripple fluctuations of the stock market. It will not make you rich – no low-risk approach will do that – but this short-term trading technique is effective, profitable…oh yes, and fun.