6 Lessons from William O'Neil on Making Money in Stocks

About William O'Neil

William O'Neil is is the founder of Investor's Business Daily and one of the most successful stock traders in history. He is also the author of the best-selling investment book "How to Make Money in Stocks". In this book, he offers six lessons from his winning system to help make money in the stock market. Each of these lessons is important, and if followed correctly, can help you make money in stocks over time. He has a long history of investing in stocks, and his net worth is estimated to be in the hundreds of millions. O'Neil's advice is highly sought after, and he has helped many people make money in stocks with his bestselling investment system, CAN SLIM investment strategy.

In this article, we'll take a look at six of his most important lessons for making money in the stock market. If you're looking to make some extra cash through stock market investing, be sure to keep these tips in mind!

1. Invest in the stock market for the long term.

A chart of the S&P 500 from 1950 - 2016

When investing in stocks, it is important to remember to think long-term. This means that you should not expect to make a quick buck; rather, you should invest with the expectation of making money over time. By investing for the long term, you give yourself the opportunity to benefit from the compounding of returns. This means that your investment will grow at a rate that is higher than the rate of inflation, which can help you build wealth over time.

In addition to thinking long-term, it is also important to have a disciplined approach to investing. This means that you should not let emotions guide your investment decisions. Instead, you should base your decisions on sound analysis and research. By following a disciplined approach, you will be more likely to make money in stocks over the long term.

Investing in stocks is a long-term game. William O'Neil, the founder of Investor's Business Daily, has said that investors should hold their stocks for more than 10 years as part of his winning system. This allows time for the stock to recover from any downturns and for the company's earnings to grow.

Here are six reasons why you should invest for more than 10 years:

1. You'll avoid the noise of the market's price movements and be able to focus on the long term.

2. You'll be buying into companies that have a proven track record of success.

3. You'll benefit from compounding interest on your owned stocks, which will allow your earnings to grow over time.

4. You'll be less likely to sell during general market downturns, which will minimize your losses.

5. You'll give your investments time to recover from any bumps in the road.

6. You'll be able to take advantage of dollar-cost averaging, which will help you buy more shares when prices are low and fewer shares when prices are high.


2. Buy quality stocks.

A picture displaying FAANG logos

When investing in stocks, it is important to buy quality companies. This means buying companies that have a history of making money and are likely to continue to do so in the future. These are the types of companies that are most likely to continue to make money and grow over time. By finding winning stocks and investing in these types of companies and market winners, you will be more likely to make money in stocks.

O'Neil recommends looking for companies with the following characteristics to find winning stocks:

Companies that are growing at a fast pace.

When it comes to investing in the stock market and choosing your stock selection, there are a lot of different things to take into account. One important factor is the growth rate of a company. Companies that are growing at a fast pace are likely to provide better investment opportunities than those that are not - these are often called growth stocks.

Companies that are growing rapidly have more potential for future growth than those that are not. This makes them a safer investment choice and increases the likelihood that you will see a return on your investment.

Companies with high growth rates tend to be more successful in the long run than those with low growth rates. This is because they are able to attract more customers and make more money as they continue to grow, becoming market leaders.

Companies that are growing quickly tend to be more profitable than those that are not. This is because they have more revenue and can command higher prices for their products or services.

One of the benefits of investing in companies that are growing rapidly is that their stock prices tend to be higher than those of other companies. This means you can make more money if their stock prices rise over time.

Investing in companies that are growing rapidly can be exciting, because there is always the potential for them to do even better in the future, making it a good stock. This can make it more fun to watch your stock selection rise over time and see your investment portfolio grow.

Companies that have a strong track record of profitability.

There are a few key reasons why you should invest in companies that have a strong track record of profitability. First, these companies have a proven track record of success, which means that they are likely to continue to be profitable in the future. Second, these companies tend to be leaders in their industry, and so they are likely to experience continued growth. Finally, investing in profitable companies is a sound long-term investment strategy, as these companies are less likely to go bankrupt than other types of businesses.

In order to find these kinds of companies, you can use a stock screener to filter for stocks with high profitability. Once you've found a few companies that look promising, you can research them further to see if they are indeed good long-term investments.

Companies that have a strong brand and are leaders in their industry.

When you invest in stocks, it is important to buy quality companies. This means buying companies that have a history of making money and are likely to continue to do so in the future. These are the types of companies that are most likely to continue to make money and grow over time.

One of the best ways to identify a quality company is by looking for one that has a strong brand and is a leader in its industry. A brand is important because it represents the reputation of a company. Consumers are more likely to buy products from companies with strong brands, as they know that these companies stand behind their products.

Leaders in their industry are also important to consider when investing in stocks. These are companies that have a commanding market share and are able to charge higher prices for their products or services. They are also more likely to be profitable than other companies in their industry.

When you invest in companies with strong brands and that are leaders in their industry, you can be confident that you are investing your money in a sound business. These companies are less likely to go bankrupt and more likely to experience continued success in the future.


3. Diversify your holdings.

diversified portfolio pie chart

One of the most important lessons that William O'Neil teaches in his winning system, the CAN SLIM investment strategy, is the importance of diversifying your holdings. This means that you should not put all your eggs in one basket, but rather spread your money out among a variety of different stocks. This will help protect you against any major downturns in the market, and will also allow you to capture a wider range of profits.

When you are diversifying your portfolio, it's important to think about other ways to grow your money outside of the stock market. Mutual funds, real estate and precious metals are two great options to consider.

Diversify with real estate

Real estate can be a great way to protect your portfolio from downturns in the stock market, while also providing you with potential profits as the market recovers. There are a variety of different real estate investments you can make, from buying properties outright to investing in real estate funds or REITs.

If you're looking to add some real estate exposure to your portfolio, you may want to consider investing in REITs. Real estate investment trusts (REITs) are companies that own and operate income-producing real estate. They offer investors a way to gain exposure to the real estate market without having to purchase property outright.

REITs, essentially real estate mutual funds, can be a great way to diversify your portfolio, as they tend to perform differently than stocks and bonds. They can also provide you with regular income payments and the potential for capital gains when the underlying properties appreciate in value.

Diversify with precious metals

Precious metals, such as gold and silver, can also be a good investment during tough economic times. They are often seen as a safe haven investment, meaning that they hold their value well even when the new york stock exchange is falling. Additionally, they offer the potential for significant profits if prices rise in the future.

For these reasons, many investors choose to invest in precious metals during periods of economic uncertainty. However, it is important to remember that prices can be volatile and that investing in these assets comes with risks. As such, it is crucial to do your research and consult with a financial advisor before making any investment decisions.

Diversify with different currencies

When it comes to diversifying your portfolio, currencies are a great option to consider. There are a number of different currencies you can invest in, and each has its own unique risks and rewards.

To start with, you can invest in the major global currencies, such as the US dollar, the euro, and the Japanese yen. These currencies are backed by some of the largest economies in the world, and so they offer stability and liquidity. Additionally, they are traded in a variety of different markets, which means that you can find opportunities to invest in them at any time.

You can also invest in emerging market currencies, such as the Brazilian real or the Chinese yuan. These currencies offer the potential for greater profits, but they also come with more risk. That said, if you invest wisely and look at stock charts, you can make a lot of money with these currencies.

It's important to remember that investing in currencies is a risky proposition. So make sure that you do your research before investing any money by looking at stock charts and doing data research. Talk to your financial advisor to get their thoughts on which currencies might be a good investment for you.

4. Follow the trend and market direction.

a chart of the bullish and bearish trends in the S&P 500

When investing in stocks, it is important to follow the trend and market direction. This means that you should buy stocks that are going up in price (or are displaying profitable trends) and sell stocks that are going down in price (for example, when a stock's price decreases in a bear market). By following the trend, you will be more likely to make money in stocks.

In order to keep up with market direction trends, it is important to watch the news and follow financial reports. By staying informed with equity market information and price patterns, you will be able to make informed investment decisions and decode price movements. Additionally, it is helpful to have a good understanding of market analysis tools and strategies. William O'Neil is a well-known investor who has written extensively about how to make money in stocks on his website "Investor's Business Daily". His books and articles provide valuable insights into the world of stock market trends. By reading books (such as The Stock Trader's Almanac) and following the news you will be able to make informed investment decisions and develop a winning system.

Sign up for The Investing Journal today to get daily stock market and investing news. This free newsletter will help you stay informed and make more money in stocks, no matter the general market trend.


Investing In a Bear Market

Bear markets can be daunting for investors, but if you follow the trend, you can make money even when the market is down.

Bear markets can be good for investors because they provide opportunities to buy stocks at a discount. During a bear market, stock price patterns fall and valuations become more attractive, so your investing strategies need to change. This can provide investors with the opportunity to buy high-quality stocks at a lower price, which can result in higher returns over the long term.

Additionally, bear markets can be a time when businesses are forced to become more efficient and competitive. This can lead to better long-term performance for companies and increased profitability for shareholders.

Overall, bear markets can provide opportunities for investors to buy high-quality stocks at a lower price, which can lead to higher returns from their owned stocks over the long term.

Investing In a Bull Market

A bull market is good for investors because it allows them to make money by buying stocks at a low price and then selling them at a higher price. In a bull market, stock prices are generally rising, so investors can make a profit by buying stocks when they are cheap and then selling them when they are expensive.

However, a bull market can also be dangerous for investors because they may become too confident and invest too much money in stocks, buying them at high prices and then selling their owned stocks at low prices. Mutual funds can provide a solid foundation and be some of the best stocks to invest in in a bullish market.

5. Cut stock market investing losses quickly.

Scissors cutting losses

When it comes to trading stocks, it's important to cut your losses quickly. If you're not making money, then you're losing money, and it's important to minimize those losses. William O'Neil is a great example of someone who knows how to do this. He has written extensively about how to make money in stocks, and one of the key tenets of his approach is to cut losses quickly.

There are a few reasons why it's important to cut your losses quickly. First, if you let your losses run, they can quickly spiral out of control. Second, if you're not making money in stocks, then you're losing money, and it's important to minimize those losses. Finally, any money that you can save by cutting your losses can be put towards investing in your most successful stocks stocks that have the potential to make you money.

So how do you go about cutting your losses quickly? There are a few things that you can do. Firstly, develop a plan and stick to it. Have specific rules for when you will sell a stock and when you will cut your losses. Second, use stop losses. A stop loss is an order that you can set for a stock that will sell it automatically if it falls below a certain price. This can help you avoid letting your losses run out of control. Finally, be disciplined. Don't let your emotions get the best of you. Stick to your plan even if the stock market is crashing or the company you invested in is tanking.

6. Keep a buy and sell diary of your winning system.

A filled out trading journal

One of the most important things you can do to improve your stock trading skills is to keep a diary. A trading diary is a valuable tool for any stock trader, and it can help you become a more successful investor.

In his classic book, How to Make Money in Stocks, William O'Neil recommends that investors keep a trading diary of all your buy and sell transactions. This will help you track your successes and failures, so you can learn from your mistakes and not lose money.

There are many reasons why you should track your stock buys and sells to help you become a more successful trader and develop a winning system.

Learn from your mistakes

By tracking your investment success and failures, you can learn from your mistakes and make more money in stocks.

Investors should learn from their mistakes in order to not repeat them. One of the best ways to do this is to study the mistakes of others.  William O'Neil's book, "How to Make Money in Stocks", is a great resource for learning about some of the most common mistakes investors make.

Help you stay disciplined

Secondly, keeping a trading diary will help you stay disciplined in your trading. It is important to stay disciplined in your investing.

By keeping a record of all your transactions, you will be less likely to make impulsive decisions that can lead to losses and you will be less likely to make these careless mistakes and stay on track to achieving your financial goals.

Keep yourself accountable

Finally, it will keep you accountable to your trading goals. By recording your stock purchases and sales, you will be more likely to achieve the financial goals you have set for yourself.

By keeping yourself accountable to your trading goals, you will be more likely to achieve them. By recording your stock purchases and sales, you will be able to track your progress and make necessary adjustments to reach your financial goals. This is important because it will help you stay focused on what is important and avoid making impulsive decisions that could jeopardize your success, such as breaking your buy and sell rules.

Conclusion

A black and grey photo of William O'Neil

Making money in the stock market is not easy, but it is possible. By following the advice of William O'Neil, you can improve your chances of success. To make money in stocks, it is important to follow the trend, stay informed, and cut your losses quickly. By reading books and following the news, such as O'Neil's publication - "Investor's Business Daily"- you will be able to make informed investment decisions and find big price gains tips. Additionally, by keeping a trading diary you will be able to track your successes and failures, so you can learn from your mistakes and become a more successful trader through developing a winning system with proven techniques and making smart investments.

Where to find How To Make Money In Stocks William Oneil

William O'Neil's book - How To Make Money In Stocks

If you would like to purchase a copy of William O'Neil's book on How To Make Money In Stocks, you can find it on Amazon, where he talks about his CAN SLIM investment strategy. He also promotes his book through his newspaper, Investor's Business Daily, which provides great financial journalism. Read it to find out more about william o neil net worth.

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