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
Biggsville limousine Chicago airport .. Lockport Chicago limo O’HareWe learnt the following the hard way! If any of... Read More
What can I expect to make my first year of... Read More
Ever turn down a street, get half way and suddenly... Read More
One Saturday morning, while he was sitting at his computer... Read More
We have two candidates for president that have really different... Read More
Stock trading can be a very profitable activity. You can... Read More
Ever notice how behavior in one area of life can... Read More
During the month of January the Dow Jones Industrial Average,... Read More
In his wonderful book, 'Multiple Streams of Income', best selling... Read More
Being wrong is OK, but let's not carry it to... Read More
It seems that every day I turn on the TV... Read More
I would like to share with the reader an article... Read More
In 1960 an engineer working for a watch company in... Read More
If you have been watching the stock market at all... Read More
For weeks, no, months we have been bombarded with nothing... Read More
If it walks like a duck, quacks like a duck... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
Since I can remember, and that's a long time ago,... Read More
When an individual investor wants to roll up his sleeves... Read More
The Shadow knows. Remember him? It seems a shadow has... Read More
The trash business in its efforts to cook their books... Read More
Are you paying any attention to your retirement savings? Do... Read More
I read a comment by a forum member on another... Read More
All stock trading and investing methods must deal with the... Read More
The Law of Chaos is the theory of random unpredictable... Read More
to o hare transportation Arthur ..The fight continues to rage among traders who use technical... Read More
The greatest stock market myth is the idea that investing... Read More
Let's first define insanity. It is doing the same thing... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
Any online investor / trader seeks an excellent off or... Read More
Wall Street's watchword has always been diversification, but what does... Read More
People are constantly asking me why is the stock market... Read More
On the 40 year journey through the turmoil of a... Read More
You read and hear a lot about hedge funds. Unfortunately,... Read More
I feel that an investment strategy in the stock market... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
Before you buy another car you walk around the lot,... Read More
There are many important things you need to know to... Read More
Mutual funds and brokers are always preaching not to buy... Read More
'Sector funds are too risky.' 'I doubled my money with... Read More
During the day I watch CNBC-TV, the stock market channel.... Read More
Jack and Jill went up the hill to fetch a... Read More
Forget making a profit; instead focus on the income provided... Read More
Have you ever thought of investing? Do you have a... Read More
As I said in Part I everyone in the insane... Read More
A few years back ? it seems like an eternity... Read More
Ever done any whitewater rafting or canoeing? Long periods of... Read More
Refuse is a serious issue in any society, about as... Read More
Most stock traders know that momentum trading can be a... Read More
With over 6,000 mutual funds available, it may be tempting... Read More
Stocks & Mutual Fund |