With all of the major indexes trading at or near their all-time highs, there are plenty of investors handily beating the market.
So why are so many other investors underperforming the market?
Could it be that one of the reasons why so many people are not seeing the kinds of returns they want is because they don't know of new stocks to get into? They find themselves in mediocre stocks because they don't know of anything better instead?
I think that for some, their knowledge or 'universe' of familiar stocks is relatively small and this limits their opportunity of getting into better ones.
Which Half Are You In?
Nearly half of the companies in the S&P are beating the index and showing positive returns this year. But that means roughly half of the stocks in the S&P 500 are underperforming the Index.
Even 'good' companies like General Mills; they're down -10.64%. Or Target, which is down -21.28%. Or even Grainger, down -26.92%. So what gives?
I don't single these out so you can feel bad if you have them. But instead, to stop and think about 'why' you have them.
Nobody invests so they can underperform the market. But if you are -- why? You don't have to. If you're underperforming the market, that means you have more of these types of laggards in your portfolio than leaders.
More . . .
See Zacks' Top Stock-Picking Strategies
Are you looking for proven stock screens to give you a trading edge? Or would you prefer an easy-to-use tool to create your own screens? In either case, you may want to take a look at Research Wizard.
Research Wizard is a robust stock-picking and backtesting program. It includes more than 50 predefined strategies with the most up-to-date buy lists and over 650 stock criteria to build and evaluate your strategies, to see what works before you place your next trade.
Starting today, you can try Research Wizard for 2 weeks free -- no credit card required.
Get the details >>
How the Other Half Lives
Of course, there are a lot of big names beating the S&P too. Take Wal-Mart, or Aetna, or Amazon for example. All are outperforming the S&P with gains of 16%, 25% and 33% respectively.
But now let's move outside of the S&P.
Did you ever hear of a company called Merit Medical? What if you did? It has outperformed the market by gaining 57.17% since the start of the year. Or Kronos Worldwide? They're up 76.80%. Or Petmed Express? Up over 112%. (By the way, these are all Zacks #1 Rank stocks.)
There are hundreds and hundreds of stocks producing fantastic gains that many people may never have even heard of.
What about you? How many times have you heard about a stock or read about a stock that skyrocketed -- only to think to yourself: "if only I knew about that stock ahead of time, I would have been in that".
Expand Your Universe and Pick Better Stocks
Increasing your stock knowledge and awareness of new and better stocks is easier than you think. And you don't have to reinvent the wheel.
• For example, over the last 29 years, the Zacks #1 Rank stocks have beaten the S&P 500 in 24 of the last 29 years, with an average annual return of 25.3% a year vs. the market's 10.2%. That's nearly 3 times the returns of the S&P with an 82% annual win ratio.
• Stick with the top industries. Since roughly half of a stock's price movement can be attributed to the group that it's in, you'll significantly increase your odds of success by focusing on the best groups. By how much? Our tests have shown that the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of 2 to 1. And the top 10% of industries outperform the most.
• Or select your next stock from a proven profitable stock picking strategy -- like our 'Filtered Zacks Rank 5' strategy which was up over 70% last year; or our 'New Highs' strategy which was up 95%, or the 'Value Method 1' strategy which was up a whopping 153% last year!
Once you know what to look for, and how to pick better stocks, it can transform your portfolio.
You don't need to turn yourself into an analyst to beat the market. Just focus on what works, and apply those methods consistently.
For most of us, our investments are the largest, most important chunk of money we'll ever be responsible for in our entire life.
And if it isn't now, it likely will be one day.
The leaders in the past (stock names we're all too familiar with) will likely not be the leaders in the future.
But you can stay ahead of the pack by following some simple rules and methods that have proven to work.
And don't be afraid to consider a stock you may never have heard of before. There was a time when some of the best stocks in your portfolio today, were brand new to you before you bought them. And now they're one of your top performers.
The next time you read about or hear about a stock that's skyrocketed in price; instead of thinking, 'I could have been in that had I known about it' -- wouldn't it be great to say, 'I'm in it!'
Where to Start
You can beat the market. And there's a simple way to get started: Try our Research Wizard stock-picking tool for 2 weeks free.
Choose from built-in, proven, market-multiplying strategies that fit your trading style. Over the past 17 years, the average yearly gains of our Top 10 strategies have been almost unbelievable. One has outperformed the market 14X over.
How have they done lately? From 2016 through Q1 2017, they racked up a flurry of double and triple-digit gains. As a group they more than tripled an already robust market.
Today I invite you to see the latest buy recommendations from these Top 10 strategies.
Or use the Research Wizard to create and backtest your own stock-picking screens. It's easy to do. And you can start outperforming the market on your very next trade.
As an extra bonus, you'll also get a free copy of Zacks' Top 10 Strategies revealing the formulas behind stock screens I mentioned above. Seeing what makes these strategies successful can help you create your own winning screens.
Note: If you start your free trial no later than midnight Sunday, August 6 you can download our Top 5 Valuation Secrets (also free). This Special Report shows how to quickly spot the best stocks for making money.
See the latest Research Wizard stocks right now >>
Thanks and good trading,
Zacks VP Kevin Matras is our chart patterns and stock screening expert. He also developed many of Zacks' most powerful market-beating strategies that come with the Research Wizard.