The Average American gets burned in the stock market because they don’t have a pipeline into a company to see what is coming down the pike.  The Big Boys on the inside have already discounted the stock by the time you and I learn that the FDA is going to approve a new drug, for example. 

I’m not one of the Big Boys.  But I’m not your Average American, either.  I just recently made an annual rate of return of about:

So how did that happen?  Well, it is a combination of tactics, strategy, tools and patience.
 
Tactics:  At the tactical level, I don’t have real stock picking expertise, or resources.  By investing in mutual funds managed by skilled stock investors I buy and sell stocks with virtual expertise and disperse the risk across multiple companies.  And I am relying on the insider connections of the mutual fund manager to make me a virtual Big Boy.  But that is a well know advantage of mutual funds.  I’m not telling you anything new – simply laying the crucial foundation for the strategy.
 
Strategy: The strategy is simple, and maybe even obvious.  I deal only in sector mutual funds.  Why?  I may not be your Average American, but I am definitely not one of your Big Boys.  If I put my money in the pot on their table, they’re gonna fleece me.  I’m not in that game.
 
My game is world events, past and present, and how those events are going to influence sectors such as air transportation, or computers.  And that information is available to the Average American as well as the Big Boy.  But, you have to get smart about where you look and what to look for.
 
I don’t waste my time on parochial newspapers such as our very own The Arizona Republic.  Even its Business Section is recent history, yesterday’s news.  And I can’t emphasis too much that timing is everything in stand-up comedy, dancing, hand-grenades and investing in the stock market.
 
I don’t waste my time on the Wall Street Journal (WSJ), either.  No argument; it’s a top shelf financial daily.  But it is of limited use to me without being in the Big Boys’ club.  Now you might want to keep an eye on the WSJ for background, but I don’t have the time or need.  My strategy uses a couple of periodicals that I find to be very useful.

I study (not just read - study) the Investors Business Daily (IBD) weekend edition and analyze the sector trends in its Industry Group Rankings (IGR).  Some interesting trends emerge from time to time. 

It is pretty easy to fit the IGR sectors to Fidelity’s Select Fund Categories.  Each Fidelity Select category has a wealth of past performance history that may be sliced and diced on the internet.  Yes, yes, I know – past performance is no guarantee of future luck.  But a pattern of performance in the Fidelity Select category that correlates with an identified trend in a corresponding IBD IGR sector may be a signal that the Big Boys are aware of something coming down the pike for that sector.  I can take a ride on whatever that is by investing in that sector's corresponding Fidelity Select mutual fund.  The success with the computer stock mentioned above resulted from a trend identified in the IBD IGR.

A weekly magazine out of Great Britain that I highly recommend is The Economist.  I read The Economist to get a world class international perspective, not so much on the world of business but rather on what’s happening in the world that will affect the stock sectors mentioned above.  This an Average American can do without a pipeline into the Big Boys’ boardroom.  In fact, my success with the airline stocks mentioned above is directly attributed to a trend presented very convincingly in The Economist.
 
So my tactic is to leave the detail work to a mutual fund manager that has the expertise that I will never have.  That leaves the tactical details to the experts and frees me up for more productive strategic analysis and planning for my investments.  My strategy levels the playing field because while I may not know what is coming down the pike in a given company, I can analyze sector trends and world events and read expert opinions that are available to everyone, not just the Big Boys.
 
Now, about those tools, and that patience.  These are subjects for further articles, depending on the interest.  If there is enough interest, I will take the time and make the effort to compose the articles.  If not, then I haven’t rung enough bells and that’s that.
 
Disclaimer:  I have no interest in selling anyone anything.  In fact I have nothing to sell.  I recommend the periodicals, Fidelity, and share this technique because I have found them useful, but I encourage you to do your own homework.  Any risk assumed is all yours.   I simply enjoy presenting, discussing and sharing a technique that I have developed for myself, and which has had some modicum of success.  Nothing more.