When you stand on the ocean shore and watch the waves breaking you might become aware that the tide is coming in or going out. It is a slow process to watch the water retreat and when it finally gets to its lowest point it is almost impossible to tell if it has stopped or will retreat further. Plenty of wave action, but going nowhere.
This reminds me of our current stock market. It still looks like the tide is going out because for the last 2 months all the major stock indexes have been inching down. Even the talking heads on CNBC are saying you must be cautious. They would be fired if they told you to sell. How can you tell what is gong on? Almost every analyst and broker looks at the major market indexes ? the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Index. On the surface they look very negative.
The DOW is composed of 30 large companies. The S&P500 has 500 companies of many sizes, but the number (index) generated is weighted by the size of the company. The bigger it is the more it affects the index. And the Nasdaq is smaller companies and have more of the high tech corporations that have been hit so hard and are still having mucho trouble. The professional traders and mutual fund managers relate more to the S&P500. Almost all domestic stock mutual funds have been lower in price for the first quarter.
Even though the S&P has been slipping it is interesting to note that 300 of the 500 stocks that make up the index are HIGHER. Yes, 60% of them have continued to advance, but it doesn't show - yet. When a market is changing directions it is similar to watching the tide stop going out and slowly change. That is what is going on now. The wave action is there, but you can't see that the body of water is now beginning to move the other way.
There are some strong underlying currents such and the Small and Midcap Value stocks, Real Estate stocks, the Leisure group and Financials. This applies to picking individual issues as well as buying mutual funds that specialize in these areas. If you want to be successful ? make money ? in this market you must be with the strongest group so you must switch from weak stocks and mutual funds to those that are currently strong. Fund managers tell you to look at the 3 and 5-year track record and "stay for the long haul". All that does is make money for him, not you. You must find the no-load mutual funds that are going up the fastest during the past 3 and 6-month time period and buy them now.
The only way to Buy and Hold is to buy and hold only while they are going up and to sell them immediately when they start to decline. Don't let the weak stocks or funds carry your cash out with the money undertow.
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
executive chauffeured services Bradford .. Madison to Airport carIs really not as important as to how you invest... Read More
Very few people, even professionals, have heard of the Dalbar... Read More
It is finally catching up with them. The brokerage companies... Read More
When will the stock market stop going down and start... Read More
The stock market often closes a week in the middle... Read More
No, this is not a symbol for some Latin number.... Read More
If you go to Haiti or other places in the... Read More
Ever done any whitewater rafting or canoeing? Long periods of... Read More
Before they go over the cliff to their destruction these... Read More
With all the bad news that has been dumped upon... Read More
I go to the Money Show every year to visit... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
For the last 12 years we have seen the Japanese... Read More
One of the main reasons many of us get into... Read More
There are many important things you need to know to... Read More
Minority Report the movie may not be far off if... Read More
Money management starts with protecting your capital, realizing profits and... Read More
Cat or dog? Maybe Zebra. Shucks, I don't know, but... Read More
Three little pigs went to the market to stock up... Read More
What! Me worry?Many of you remember the cover of MAD... Read More
A 'stock option' is a contract between two parties giving... Read More
Analyzing growth stocks is an important focus for any investor.... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
Hedge current portfolio positions and gain access to capital resources... Read More
It looks like the market is ready to start up... Read More
O'Hare Chicago prom limo ..One of the greatest challenges of investing in stocks is... Read More
After the publication of the first part of this two... Read More
Humpty Dumpty had a great fall and all the King's... Read More
If you're a normal human being, your need to feel... Read More
On Friday or Saturday evening my wife gets a movie... Read More
Wall Street has been preaching for years and years to... Read More
Just about now everyone is confused as to which way... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
Suppose your position has made a big move and you... Read More
The trash business in its efforts to cook their books... Read More
Before they go over the cliff to their destruction these... Read More
Where is the beef? Or maybe it should be where... Read More
It depends on your level of understanding of the market... Read More
Ever have one of those sample boxes of candy? Each... Read More
Every broker and financial planner will tell you that you... Read More
Investing in long-term financial vehicles give you the most gains... Read More
The date October 13, 2000 will forever be embedded in... Read More
Today we are inundated with tons of information about the... Read More
Let's hope you did not have any of the Enron... Read More
There is nothing more exciting than finding an undervalued stock... Read More
One of the main reasons many of us get into... Read More
There are many important things you need to know to... Read More
One of the things people are always asking me is... Read More
One of the most believed bits of conventional wisdom from... Read More
IT'S REMINISCENT OF THE OLD children's tale about an old... Read More
Stocks & Mutual Fund |