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
move in cleaning service Glencoe ..The basis of diminishing return discussions surround such simple notions;... Read More
Mutual funds were created with the idea that one person... Read More
The demand for world oil is increasing while world reserves... Read More
Ever turn down a street, get half way and suddenly... Read More
Sidney felt sick as she looked at her latest OptionsXpress... Read More
Today we are inundated with tons of information about the... Read More
I receive emails from Morningstar. This company provides statistics and... Read More
I go to the Money Show every year to visit... Read More
Most advisors will tell you they can beat the market.... Read More
You'd have had to be living on a desert island... Read More
There is so much involved in developing peak performance, that... Read More
One Saturday morning, while he was sitting at his computer... Read More
Regardless of the fact that the world's stock markets have... Read More
I was recently interviewed for a press release through a... Read More
If you are fed up with early redemption charges and... Read More
"There is nothing more frightful than ignorance in action!" Johann... Read More
There can't be many traders who haven't at least considered... Read More
I love roller coasters. The steeper the better. High and... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
Whenever I see mutual fund comparisons in the trade publications... Read More
Everyone who invests in the stock market wants to be... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
Checked your 401K lately? Going back to about a year... Read More
Because you don't feel too sure about which stock or... Read More
It seems that every day I turn on the TV... Read More
disinfecting cleaning services Winnetka ..I have a 2-car garage. There are nice shelves on... Read More
We all know that emotions control every decision that an... Read More
In today's volatile and confusing stock markets everyone is searching... Read More
What the heck am I talking about?It is often said... Read More
As the man said, "I've got some good news and... Read More
What is the Series 7 Exam? If you... Read More
Who are the successful investors?There are those who follow the... Read More
Is really not as important as to how you invest... Read More
If you have a pension plan at work you will... Read More
One Saturday morning, while he was sitting at his computer... Read More
Now that you have some money burning a hole in... Read More
Someday you may want to retire and continue to live... Read More
Why? Because I am going to shatter your conventional wisdom... Read More
Do you have a financial planner? Does one of your... Read More
It looks like the market is ready to start up... Read More
You read and hear a lot about hedge funds. Unfortunately,... Read More
With an insecure job market, overworked employees, insufficient retirement savings... Read More
If you don't know where you are going any road... Read More
The Bollinger Band theory is designed to depict the volatility... Read More
How many times have you said to yourself, "I'd like... Read More
When it comes to 401k's there is an overabundance of... Read More
"Buy and hold" is one of the most heralded investment... Read More
The stock market can present you with a lot of... Read More
I use the P/E ratio as a secondary indicator for... Read More
You've decided to try your luck at trading stocks or... Read More
Stocks & Mutual Fund |