The stock market has been in an up trend for more than a year. Almost everyone is feeling good and many believe we are back in the old bull market with the previous high of the Dow Jones Industrial Average just about to be broken.
This could be the case, but what if what we are seeing is all glitter and only has sparkle with no value whatsoever. Any one who tells you he knows is either a liar or a fool. Only the market itself will tell what it is doing and very few take the time to learn its language.
The most important thing about the stock market is the major trend. For the past year it has been up and during that time you should have owned equities ? stocks and mutual funds. Some time in the future it will turn down again (it always does despite what you broker says) and that is when you should sell your equities and keep your money in a money market account. You won't be making much, but it takes a lot more effort to make money than it does to keep from losing it.
Brokers will tell you there is no way you can determine the direction of the market. They are either lying or stupid. It is not that obscure. To mine for gold in the stock market I recommend you look at the Investors Business Daily Mutual Fund Index. Notice that the Index price is currently above the 200-day Moving Average. That penetration occurred in April 2003 and had stayed that way until May of 2004 when it broke down.
When that happened you sold everything and went to cash. It went back up through that 200 line shortly after so you should have bought back into equities. Now you are fully invested again maybe in other equities that are performing better than those you had before. Is this a new gold mine or fool's gold? You don't know yet, but you will learn that the trend is your friend.
If you did sell out your previous stocks or mutual funds you should have looked to see where you want to buy again. There is something called sector rotation that will definitely increase the return on your money. At times the technical stocks and funds do better than the real estate group or the banking group. You should be where the strongest funds are and these you can find with a search on the Internet.
Don't be a fool and try to ride out a weak stock or group. Just a few years ago AT&T was $100 per share. Today it is $15. So much for the widows and orphans; they have lost their gold.
What might seem to be a sure thing can turn into a financial disaster - a fool and his gold will soon be parted. Never take a big loss. Listen to the market and learn to stay with the trend.
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
family-safe home cleaners Northbrook ..It has been said that low cost or even free... Read More
If you are a baby boomer, time is not on... Read More
Minority Report the movie may not be far off if... Read More
Just about everything you have been told about Social Security... Read More
Most advisors will tell you they can beat the market.... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
I often play a little game with myself when I... Read More
Today we are inundated with tons of information about the... Read More
Because there are so many stocks that are NOT paying... Read More
It has often been said that there is only two... Read More
In 1960 an engineer working for a watch company in... Read More
Wouldn't it be nice if you were only in the... Read More
On the 40 year journey through the turmoil of a... Read More
According to Investopedia Inc. the penny stock market has seen... Read More
Well maybe that's overstating it a little, but it's certainly... Read More
The Bollinger Band theory is designed to depict the volatility... Read More
Caught in a whirlpool and being sucked under. No life... Read More
You've decided to try your luck at trading stocks or... Read More
Financial markets provide their participants with the most favorable conditions... Read More
What account size do I need?How much money can I... Read More
The stock market has been going up for more than... Read More
How many times has this happened to you? You're at... Read More
In a previously written article, we expanded the use of... Read More
I know there are a lot of you out there... Read More
I am taking the time to help others learn the... Read More
residential cleaning services Deerfield ..Profitable day traders recognize that momentum trading is among the... Read More
It looks like the market is ready to start up... Read More
Among the largest forces that affect stock prices are inflation,... Read More
I continually hear from economists, talking heads, other market letter... Read More
Should the market turn against you, it is important that... Read More
I go to the Money Show every year to visit... Read More
Ever have one of those sample boxes of candy? Each... Read More
A PEG ratio cannot be used alone but is a... Read More
I cringe every time I hear a novice investor tell... Read More
This is the continuing story of our two imaginary traders,... Read More
Success in small cap & micro cap stock trading like... Read More
Have you been listening to the talking heads on CNBC-TV?... Read More
If there is one term over-used when talking about making... Read More
As one of my regular readers you know I have... Read More
It is wonderful to be alive in the information age.... Read More
Every day I hear someone on CNBC proclaim that "this... Read More
Now that you have some money burning a hole in... Read More
It has often been said that there is only two... Read More
Mutual funds are doing more and more to discourage investors... Read More
Well maybe that's overstating it a little, but it's certainly... Read More
Most advisors will tell you they can beat the market.... Read More
People are always asking me when should I sell my... Read More
One of the things people are always asking me is... Read More
What account size do I need?How much money can I... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Stocks & Mutual Fund |