Felix Prehn, the founder of Goat Academy, shares practical advice for investors who want to make better decisions in the stock market. His approach is based on simple rules and clear thinking, making it easy for anyone to understand—even if they are new to investing.
Understanding Market Trends
Felix Prehn explains that big investment banks, like Goldman Sachs, expect the stock market to rise further. This is partly due to ongoing trade talks and changes in tariffs between the United States and China. When tariffs are paused or reduced, markets often react positively. However, Felix points out that these deals are sometimes only temporary, so investors should stay alert.
The Importance of Earnings and Profits
One of the main drivers of the stock market is company profits, also called earnings. When people expect companies to make more money, stock prices usually go up. Felix says that you do not always need to read every profit report. Instead, learning to read stock charts can help you understand what most investors expect to happen next.
The Role of Technology and AI
A big trend in the market is the growth of artificial intelligence (AI) and technology spending. The United States is expected to spend more on AI every year. This benefits companies that make computer chips, like Nvidia. These companies often have long-term deals and recurring income, which can help their stock prices grow over time.
Key Indicators to Watch
Felix Prehn recommends watching a few important indicators:
- Moving Averages: These are lines on a stock chart that show the average price over a certain number of days, like 50 or 150 days. If the stock price stays above these lines, it is usually a good sign.
- RSI (Relative Strength Index): This is a number that shows if a stock is “overbought” (too many people have bought it) or “oversold” (too many have sold it). Felix says this indicator is not always reliable, but it is popular in the media.
- VIX: This is a measure of how much the market is expected to move, also called “volatility.” A low VIX means the market is calm. If the VIX goes above 20, it can be a warning sign that trouble is coming.
The Power of Rules and Systems
Felix Prehn believes that following a set of rules is the best way to invest. This means having a plan for when to buy and sell, and not just guessing or hoping for the best. By using a system, investors can avoid big losses and make steady gains over time. He suggests writing down your rules and testing them with a practice account before using real money.
Learning from the Charts
Charts can show what most investors are thinking. If a stock is rising with high trading volume (lots of people buying), it often means big investors are interested. This can push prices even higher. On the other hand, if a stock falls but not many people are selling, it may not be a big problem.
Staying Cautious
Felix Prehn remains positive about the market but reminds investors to be careful. There are still risks, like new taxes, regulations, and trade deals that need to be completed. Staying informed and following a clear system can help investors succeed, even when the market is uncertain.
For more about Felix Prehn and his approach to investing, visit the Goat Academy About page.