"You also have to let the overall market trend be your guide as to whether it is a good time to be in stocks or not," James said in "Success Stories."
Smith said investors look for companies selling products with a high demand.
When Apple introduced the iPod, Smith said everyone from children to grandparents wanted the portable music player.
"That's what will cause the investor to go in," Smith said. "When you have a mass market for a product or service, that will really drive the earnings and that's where the professional money put their money."
But Smith warns in her book, "Never buy stocks right before earnings because anything can happen."
If the company continues to report high earnings, then buy their stocks, she said.
In "How to Make Money in Stocks Success Stories," Smith talks about how Barbara James admits to having a "favorite pet stock" with F5 Networks. In April she had sold for a profit of 12 percent and in November for a profit of 22 percent.
But the third time for F5 Networks was not the charm, Smith wrote.
"Barbara broke one of her rules and bought the stock right before earnings," Smith wrote.
F5's earnings disappointed expectations and the stock dropped 26 percent, she wrote.
"A stock can sour on good earnings or dive precipitously on disappointments," Smith said in her book.
There are times within the market when investors should protect their money, go to cash and wait for the market to get healthy again.
Having a few successful stocks in a year will still bring individuals out on top, she said.
"The idea is to keep your losses small and let your winners run and that's how you make money in the big market," Smith said. "With the stock market, you can achieve some outstanding results."
Smith said she wrote the book to share success stories of everyday investors with the public. She outlines the mistakes each person made while explaining -- using charts as tools -- how they ended up on top.
The market expert said she has plans to write a second book after the positive reaction to "How to Make Money in Stocks Success Stories."
Reach Megan Workman at megan.work...@wvgazette.com or 304-348-5113.