The stock market and stock investing are a mystery to most people. They don't know the secret to stock investing. If you want to beat the stock market, concentrate less on fundamentals like P-E ratios and dividend yields, and learn to play the game.

When you play the stock market view it as a people game... a game of fear and greed and anticipation. How you feel about the future is secondary. How the majority of investors feel is everything.

Stock prices go up when investors bid prices higher in anticipation of good times or better times ahead. Everyone wants his or her share of the profits (greed). The stock market falls when investors sell in anticipation of a worse economic future (fear).

Collectively, investors look about six months down the road when they place their bets. Will things be better or worse?

You don't need to predict the future to make money in stocks. You just need a pulse on how the herd of investors is thinking. The secret is that if you know how your competitors think (other investors), you can predict their actions and stay one step ahead of them.

So, as you follow the news and the stock market don't think in terms of how you should react to it. Think in terms of how others will react.

You don't need to outrun the bear. You only need to stay one step in front of the herd.

Look at stock market history and correlate stock prices to the news of the day. You will find that stock prices often turn around in bad times before the economic news seems to justify a turnaround. Investors anticipate the future.

You beat the stock market by anticipating how the other players will react to the economic and financial news of the day. You make money in stocks over the long term with a sound investment strategy. Play the stock market as a people game. Invest for the long term by concentrating on asset allocation.

The secret to long-term investing is to maintain a balanced portfolio of stocks, bonds, safe investments and alternative investments.