Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one. So good! One more. And another. Before you know it the box is empty. Nothing left.
This upmove in the stock market is very tempting - and could leave you with a tummy ache.
All the market "experts" are telling you that the bull market is back and to get your buying clothes on. Open your wallet and get in before it is too late. Mr. Schwab says it is dangerous to be out of the market. There are great values out there. These stocks are so low they can't go any lower. And there is a Santa Claus and an Easter Bunny.
There is one position I do advocate, but most broker and financial planners won't like it. It is called CASH. No broker believes cash is a position. They say you must always be "invested". It seems they have forgotten that investing means making money and another important part of investing means not losing money.
For the last month we have seen the market go up and some of you have seen some of your money come back. Not too much, but some. You want desperately to believe the bull market is back and your winnings will be restored. I sure hope so. Just suppose this is what is called a rally in a bear market and that it will not last. Then what? You don't want to see your investments slip away again, do you? You don't know if it is a good idea to sell now or wait. Your broker won't be any help.
There is a solution. Stay with your stocks and mutual funds as long as they are going up, but sell them if they go down. How? Every Friday after the close you get the settlement prices of your various issues and you then call your broker Monday morning to put in a "Good Til Cancelled Stop-Loss Order" that is approximately 10% below that closing price. As long as the stock is going up you follow this procedure every week and eventually you will be stopped out. Never move your stop down. You no longer have to guess if this is the highest price that your stock will reach. The stock itself will tell you.
Now you have cash and, if you want to, you can buy a better stock or mutual fund that is going up..
When you pick out a new chocolate (stock) do it carefully and don't try to eat the whole box at once. Sometimes it is best to put the box (your cash) away so you can come back to it another day.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
http://www.mutualfundmagic.com; 1-888-345-7870
no-contract cleaning service Des Plaines ..The demand for world oil is increasing while world reserves... Read More
Let's discuss commodities; with the latest Enron situation, it is... Read More
Now that you have some money burning a hole in... Read More
If you have been watching the stock market at all... Read More
I receive emails from Morningstar. This company provides statistics and... Read More
The bear market that showed up at the end of... Read More
If you are fed up with early redemption charges and... Read More
One of the great "secrets" of successful people is discipline... Read More
∙ Make every investment in the stock market a long-term... Read More
If you are going to be a winner in the... Read More
Hedge current portfolio positions and gain access to capital resources... Read More
Cat or dog? Maybe Zebra. Shucks, I don't know, but... Read More
Right now there doesn't seem to be any "gold fever".... Read More
If you're like many investors who squander those small dividend... Read More
If you have a pension plan at work you will... Read More
How can you dispel an illusion unless you look directly... Read More
With an insecure job market, overworked employees, insufficient retirement savings... Read More
When will the stock market stop going down and start... Read More
Question: How does it get better when it gets worse?Last... Read More
Stock trading can be a very profitable activity. You can... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
I often hear from people, "I don't trade. I invest.... Read More
Every day I see in the financial section of newspapers... Read More
When you become interested in a stock or mutual fund... Read More
The World Bank claims that some two billion of the... Read More
bathroom cleaning service Lake Forest ..Jack and Jill went up the hill to fetch a... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
Two weeks ago I wrote about what the Securities and... Read More
Before you embark upon a journey of trading stocks or... Read More
Wall Street's watchword has always been diversification, but what does... Read More
As I have said many times before in this column... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
I was devastated!I just couldn't believe it. I was 10... Read More
Most stock traders know that momentum trading can be a... Read More
Robert Rodriguez likes to buy stocks at their lows. When... Read More
If you are going to be a winner in the... Read More
One of the basic laws of physics is that a... Read More
It's about time someone spoke the truth concerning outsourcing. The... Read More
Financial markets provide their participants with the most favorable conditions... Read More
THERE'S SOMETHING TO BE SAID FOR standing firm in the... Read More
When purchasing mutual funds we are cautioned to read the... Read More
A recent cartoon in my daily newspaper showed two guys... Read More
The stock market can present you with a lot of... Read More
If you don't know what a Roth IRA is then... Read More
There are red lights, green lights, blue lights and spot... Read More
Cat or dog? Maybe Zebra. Shucks, I don't know, but... Read More
The Dow Theorycharles h. dowcharles h.... Read More
I love roller coasters. The steeper the better. High and... Read More
Minority Report the movie may not be far off if... Read More
Stocks & Mutual Fund |