ASX reporting season is here, and once again, most investors are going to get it wrong. Not because they’re not smart. But because they’re playing the wrong game.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
While the headlines are obsessing over beating or missing earnings guidance, the real professionals are watching something else entirely: the chart. Let’s be blunt, the numbers don’t move the market; expectations do.
Just look at what happened to stocks last season. Solid results yet share prices tanked. Missed expectations and prices rallied. That’s not a bug, it’s the system.
So, if you’re still thinking this is about spreadsheets and profit margins, you’re not investing, you’re speculating.
Why do retail investors keep getting burned?
It’s the same trap every year. They wait for the result and listen to the CEO spin. They hang on analyst commentary, and by the time they act, the move’s already over.
People in the know don’t wait for the announcements; they trade what’s in the charts. So, if a stock runs up before the announcement, chances are good results are already factored in. If it sells off on a bad result, the worst might already be behind it.
And if you don’t know how to read the chart, you’ll never know the difference. For over 20 years, I have been teaching traders to focus on the one thing that never lies: price. So, if you want to make money this earnings season, here are my top three rules: Ignore the noise, watch the trend, trade the reaction, not the release.
More market news
Meet GeoGeorge: The HotCopper poster so accurate he got hired as an analyst
Put the scissors away: Bullock tames RBA cut hopes – and apparently that’s a surprise
Reporting season isn’t about who reports the best; it’s about who surprises the most. You don’t need a finance degree to win. You just need to know how to read what the market is already telling you.
So, before you dive into the next stock tip or earnings preview, ask yourself: Is the price telling you to act, or are you just hoping it will?
For now, good luck and good trading.
Join the discussion: See what’s trending right now on Australia’s largest stock forum and be part of the conversations that move the markets.
Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347), the information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
This article is being disseminated on behalf of Wealth Within, a third-party issuer, and is intended for informational purposes only.