I actually pick individual stocks to invest in and only have a small portion of my assets in mutual funds. I look for companies that have good sales, earnings, low amounts of debt, good price movement, but have been rejected by the market. The market is often very irrational, but we often fall prey to it. If you own a home that you bought for $100,000, you have a good job, and your family is healthy would you sell it to me for $25,000 just because I stand out in the street yelling, “I will pay you $25,000 for your house!” Instead of saying, “oh no my house is only worth $25,000” you would wonder why some crazy man is out in the middle of the street. You have to have the same attitude with stocks.
Often the fear and greed of the stock market will push stocks to unreasonable highs or unworthy lows. This is when it is important to realize that stocks are little portions of actual companies – not just a few letters with a price chart. So, if the long term business prospects of a company are still good why would I sell just because someone offered me less for it today than they did yesterday. Also, just because the price of houses are going up does that mean I should invest money in houses? Anyone remember 2008? Price movement is only one piece to the puzzle.
Using my processes I have found great success, and started publishing my trades online. You can follow them or even link your brokerage account to the signals so you can easily make the same trades. In the first 120 days of me publishing my individual stock picking strategy it has returned twice the return of the stock market! If you want to know more just ask a question or check it out.