Rebalance And Diversify

The stock market has not been very kind to your investments lately. Your broker knows this so you may have received a call from him suggesting it is time to 'rebalance and diversify' your portfolio.

What does this really mean? He wants you to sell some of your holdings and buy something else. Probably sell stocks and buy bonds "because of market uncertainty". Sounds good, but it really means he needs some commission and you are "it". Yes, I agree it may be time to sell all your stocks and mutual funds and put everything in a money market account until this bear market is over. Your broker doesn't like money market funds because he doesn't make any commission. That may be why he never recommends them.

Rebalance doesn't have any true stock market meaning. It is one of those Wall Street words they use to confuse you. It sounds good, but that's all.

Diversify is another broker and financial planner favorite. Have part of your money in stocks, some in mutual funds, bonds and maybe 5% in a money market so you can take advantage of an initial public offering when a new one comes along. Yeah! Now let's try the true meaning of diversify: put some here, put some there and a little there (and all of this does generate commission, of course) because I really don't know what to do so we will spread it around and hope for the best.

No, I don't hate your broker or financial planner. It is just that I know they have not been trained to protect your capital or how to make money. How do I know that? I used to own a brokerage company and I know how these guys consistently lose their customers and their own money. Yes, they even do it to themselves. That's how dumb they are.

If you have lost money this year in your nice "safe" mutual fund you are not alone. Did you know that 99% of all stock mutual funds have a loss? Scary isn't it. Is there any thing you could have done to have protected your capital from a major loss? Yes there is.

For example, in 1998 you could have bought Janus 20 mutual fund for about $40/share. You and several hundred thousand others did. All of you watched as it went up to $94/share. Wonderful! Uh oh, it is now selling for $35. If you had been told by your broker (and you weren't) that it is a good policy to protect your profits with a mental stop-loss order of about 10% you could have sold out at about $80/share, but you are in for the long haul and you are a conservative investor so you won't sell.

The term conservative investor is an oxymoron. There is no such thing when you have your money on the line. You are a speculator. It happens to be that you are a long-term speculator. And they get just as burned as the day traders. It just takes longer.

Don't fall for the nonsense of rebalancing and diversifying. When one of your holdings starts down more than 10% just sell out. You want to diversify and rebalance into cash until this bear market is over.

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

green cleaning service Park Ridge ..
In The News:

Reclaim your time from big tech with effective screen time reduction strategies for iPhone and Android, featuring steps to limit app usage and create phone-free zones.
Amazon Prime Day shoppers face threats from 120,000-plus scam websites as cybercriminals prepare phishing traps and malware ahead of the July sales event.
Fox News' AI Newsletter brings you the latest on this rapidly evolving technology.
The AEON humanoid robot tackles labor challenges with Nvidia AI, Microsoft Azure cloud and advanced spatial awareness, working alongside industry leaders Schaeffler and Pilatus.
Google's Ask Photos feature brings AI-powered searches to your photo library, letting you find memories with natural language queries while maintaining privacy controls.
The return of blue book exams emerges as universities fight widespread AI academic dishonesty and educators debate whether to ban AI tools or teach responsible usage.
Signs your phone might be hacked include strange behavior, unauthorized texts, battery drain and pop-ups, while protection involves updating software and avoiding public Wi-Fi.
Tokyo startup H2L has launched Capsule Interface technology enabling full-body robot control with muscle sensors, offering immersive remote operation.
The A.I. industry seems set for growing pains as Big Tech companies scramble for solutions to the medium's unprecedented strain on the power grid.
Fourth of July fireworks cause a 60% spike in lost pets, but GPS trackers and AI photo-matching services like Love Lost can help reunite missing dogs with their families.
Protect yourself from jugging, the rising crime by which thieves monitor ATM users and follow them to steal cash, with six practical safety tips to stay alert and secure.
U.S. airlines like Delta, American and United are selling your domestic flight records to government agencies through the little-known Travel Intelligence Program.
Autonomous robots from Uber Eats are rolling out across U.S. cities, featuring LIDAR sensors, secure compartments and all-weather operation for food and grocery delivery.
Costco has expanded into EV infrastructure with new ultra-fast charging stations that can charge most electric vehicles to 80% in 20-60 minutes while shoppers browse the warehouse.
The new Gemini Robotics On-Device AI allows robots to perform complex tasks without internet, offering enhanced privacy, reliability and adaptability for real-world use.
Protect yourself from Amazon phishing scams by spotting red flags like suspicious sender addresses and spelling errors while using Amazon's Message Center to verify communications.
GAC Group's new Govy AirCab flying car combines lightweight design with advanced safety systems and smart cabin technology to revolutionize city travel with an 18.6-mile range.
The Berkeley Humanoid Light (BHL) is a lightweight, open source humanoid robot that anyone can build using 3D-printed parts and off-the-shelf components.
Meta’s new AI chatbot is getting personal, and it might be sharing more than you realize.
A new threat targets both Android and iPhone users: SparkKitty, a powerful mobile malware strain that scans private photos to steal cryptocurrency recovery phrases and other sensitive data.
Thanks to a team at the University of California, Davis, there's a new brain-computer interface (BCI) system that's opening up real-time, natural conversation for people who can't speak.
Privacy risks are hiding in plain sight, as your personal data is likely being collected, tracked, and sold without your knowledge.
VenHub, a fully autonomous, AI-powered smart store just opened at the LAX/Metro Transit Center in Los Angeles.
A woman's Facebook account takeover reveals dangerous social engineering tactics and provides lessons on recovery, avoiding scams and enacting stronger security measures.
Shanghai engineers are using 432 walking robots to relocate a complex, preserving Shikumen architecture while creating space for a modern underground hub and cultural center.

This Market Is Different

All of the talking heads have been telling us that... Read More

Investing in Trash Company Stocks

Refuse is a serious issue in any society, about as... Read More

Good Stock Market Tip; Good Return!

Forget making a profit; instead focus on the income provided... Read More

High Price/Earnings Ratios and the Stock Market: a Personal Odyssey

After some forty years of banking and investments, I retired... Read More

Peer Groups

Whenever I see mutual fund comparisons in the trade publications... Read More

Will the Stock Market be Lower in October?

The stock market often closes a week in the middle... Read More

So, What is This Stock Market Thing Anyway?

We've all heard of the stock market and probably have... Read More

Municipal Bonds

Because there are so many stocks that are NOT paying... Read More

Boiler Room 7/17/00

On Friday or Saturday evening my wife gets a movie... Read More

Jack and Jill

Jack and Jill went up the hill to fetch a... Read More

Living Trust Investing: Income Considerations when the Grantor Dies

A common problem I often see when working with living... Read More

Performance Funds

Mutual funds are doing more and more to discourage investors... Read More

Choosing A Fund

For years I have been saying you must have a... Read More

Fake Money

Reach in your pocket and take out that big roll... Read More

The Value of Stocks of a Company

The debate rages all over Eastern and Central Europe, in... Read More

Structured Settlement; Lawyers in NY and Mutual Funds

Minority Report the movie may not be far off if... Read More

Dont Lose All Your Money

That sounds like good advice doesn't it? Don't lose all... Read More

Hill of Hope

Just about now everyone is confused as to which way... Read More

Rebalance And Diversify

The stock market has not been very kind to your... Read More

Dispelling Illusions of the Stock Market

How can you dispel an illusion unless you look directly... Read More

Inertia Syndrome

When it comes to buying a stock or mutual fund... Read More

Discipline

One of the great "secrets" of successful people is discipline... Read More

Dont Buy Stocks based on P/E Ratio alone

I use the P/E ratio as a secondary indicator for... Read More

3 Components Needed for Beating the Market

Time to look back2004 is over, now we are in... Read More

Its A Duck

If it walks like a duck, quacks like a duck... Read More

emergency cleaning services Morton Grove ..