We all know the expression, "My country, right or wrong", but have you ever thought about the stocks or mutual fund you own and said to yourself, "My stock - right or wrong" and held on to your position even as you saw your hard-earned money disappearing?
This is the Buy N Hold strategy and, in case you haven't noticed, lost from 40% to 60% and more of investors' money from 2000 to 2003. Fortunately, for the past year stock markets around the world have gone up and folks have recovered about 25% to 30% from those low numbers. They are still about 60% out-of-pocket.
The market is now in an uptrend and who is to say how long it will last. A long time I hope. Never fight the trend. What the smart investor does is learn to spot the trend and go with it either up or down. What do I mean go with it "down"? The most important advice one can receive about the stock market (and I am not joking) is not to lose money. If you teach yourself to find major trends you will never lose any big money. Small losses are acceptable, but big losses are the killers.
When I was a floor trader on the exchange I had many small losses and I had an equal number of big gains. The difference was I made $3.00 profit for each $1.00 loss. At the end of the year I had doubled or tripled, sometimes quadrupled my trading account. You don't have to be a Wall Street expert to do this. Anyone can.
The simplest way is to learn to use stop loss orders. Brokers hate them and never recommend them because it makes extra work. Hey, isn't that why he is there ? to service your account?
Until you become flexible with your thinking you are doomed to be caught in the next down cycle. We ARE going to have another despite what any Maul Street says. Right now conditions look good, but some time in the future (and I don't predict when) we will have another serious bear market correction. At that time the smart investor is either in a money market account or bonds.
There is a very simple way to understand the language of the market. It talks to you every day, but few take the time to comprehend. Just these few words from Mr. Market will save you countless thousands ? "200-day Moving Average penetration". If you will look at this simple method as delineated daily in the Investors Business Daily Mutual Fund Index you will not only be wiser, but also richer. Each time the index is above the 200-day line you own equities and when it is below you are in cash. Does it get any easier than that? This will always tell you the major trend and then it is up to you to choose which equities to own.
My stock right or wrong? Don't be wrong.
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’HareLook back over the years and try to remember how... Read More
On Friday or Saturday evening my wife gets a movie... Read More
If you're like many investors who squander those small dividend... Read More
You probably have been told that options are risky. Even... Read More
Mutual funds by definition are a mixed bag of stocks,... Read More
The date October 13, 2000 will forever be embedded in... Read More
Every day in any financial publication you will find the... Read More
Every publicly traded company is required by the SEC(Securities and... Read More
According to Investopedia Inc. the penny stock market has seen... Read More
Very few people, even professionals, have heard of the Dalbar... Read More
It depends on your level of understanding of the market... Read More
An insane person cannot evaluate an insane evaluation system.As you... Read More
Do you have a nest egg? You know, a place... Read More
The World Bank claims that some two billion of the... Read More
When purchasing mutual funds we are cautioned to read the... Read More
Picture one of those clubs where only the real heavyweights... Read More
Let's discuss commodities; with the latest Enron situation, it is... Read More
(1) Stock Market is Tough Place to Make Any Money... Read More
Before you embark upon a journey of trading stocks or... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
Sidney felt sick as she looked at her latest OptionsXpress... Read More
It is difficult to make money in a bull market,... Read More
It is commonly reported that the stock market averages about... Read More
The following are a list of nine things you want... Read More
On November 17 I bought 7 different mutual funds and... Read More
to o hare transportation Arthur ..Ever have one of those sample boxes of candy? Each... Read More
Every publicly traded company is required by the SEC(Securities and... Read More
What the heck am I talking about?It is often said... Read More
If it walks like a duck, quacks like a duck... Read More
The Law of Chaos is the theory of random unpredictable... Read More
The following are a list of nine things you want... Read More
Money: the most charged word in the planet. It means... Read More
Stock trading remains a very competitive field and the stock... Read More
I receive emails from Morningstar. This company provides statistics and... Read More
Should the market turn against you, it is important that... Read More
There are formulas for just about everything, but it has... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
IT'S REMINISCENT OF THE OLD children's tale about an old... Read More
Minority Report the movie may not be far off if... Read More
Investors who exclusively use broadly diversified, no load mutual funds... Read More
Profitable day traders recognize that momentum trading is among the... Read More
Checked your 401K lately? Going back to about a year... Read More
Yesterday I received my monthly issue of MONEY magazine. This... Read More
Buy high and sell low -- It's not a typo.Millions... Read More
People are constantly asking me why is the stock market... Read More
Are you attracted to the idea of being in control... Read More
Whenever I see mutual fund comparisons in the trade publications... Read More
Mutual funds are doing more and more to discourage investors... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
(1) Stock Market is Tough Place to Make Any Money... Read More
Stocks & Mutual Fund |