The Compass Investors Success Formula

1. Find the best stocks in the best industries that are ready to profit.

Compass Investors starts with a list of companies that have the strongest economic performance amongst their industry peers. We evaluate over a dozen criteria on each company including their PE ratio, earnings per share, company growth ratio, debt to equity ratio, cash flow and insider trading.

We monitor the movement of institutional money into and out of more than 250 industry groups to help identify market sectors whose stocks are being set up to do well or poorly in the near term.

We then apply a proven combination of technical indicators to identify the best time to buy or sell the stocks we want to own.

Within the universe of more than 12,000 investing options, there are always companies and industry groups that are doing well; these are the companies whose stock and call options we buy. During overall bear markets, It is sometimes easier to find companies that are doing poorly in poor industries; these are the companies whose stock we sell short or whose put options we buy.

2. Have a predefined entry and exit strategy.

Once we decide which stock to buy and when, we define our entry and exit goals. We define exactly how much profit we expect to make and how much loss we are willing to accept  before ever making a trade. Having an exit strategy defined in advance takes all of the emotion out of the decision of when to sell.

3. Continuously monitor all holdings and take frequent profits.

Once a stock is in our portfolio, we monitor it every day looking for any change in the industry or company fundamentals that might cause us to alter our predefined exit strategy.

Our goal is to hold each position from 1 to 3 months with a goal of 10% profit per month. Our disciplined use of stop orders limits the size of any loss while selling a good stock at the peak of its profitability helps maximize our profits potential. We prefer to hold a stock for a few months and regularly put profits into our accounts rather than watching paper profits disappear during the regular oscillations of longer term holds. By frequently taking profits and cutting losses short, you continuously grow your investing base which is essential to long-term investing success.