Stops Make Money

During the day I watch CNBC-TV, the stock market channel. Fortunately, I keep the sound muted or I would be hollering at the dumb "experts" being interviewed. The experts seem to know all about the market except they don't know how to protect their capital.

Every few minutes there is a chart in bright yellow of some stock showing its price performance during the past year. Lately it seems that most of the stocks have lost from 50% to 80 or 90% of their value.

Oh yes, this beauty did go up from 20 to 120, but is now back to 20 or some number very close to erasing almost all of last years profits, many going to a loss. The commentators give a nice running explanation of the "reasons" this stock did what it did. All hindsight and we know hindsight is 20/20.

Not once have I heard one these mavens ever suggest that a trailing stop would have sold out the stockowner at a nice profit within 10 or 20% of the top of the move. Microsoft went to $120 and proceeded to lose 50% of its value, dropping to $60. If you had had a distant trailing stop you might have been sold out about $90 or better. If you are still in love with MSFT you may now buy many more shares than you had before. Make sense?

There is a correct way to use stops, but the best is a mechanical method. Just set an amount you are willing to give back. Some traders recommend an 8% stop, others 15% to 20% of the low of the previous week placed with your brokerage firm each Monday morning as a Good-Til-Cancelled sell order. There is also the simple close below the 20-day moving average computed weekly. And many others. If you care anything about your money you might want to do some study to see the type of stop you might wish to employ to protect your capital.

Most professional traders, and I know most people are not professional enough to do this, will place their sell stops below what they consider to be critical support. This is a matter of interpretation and requires experience. I can almost guarantee your broker doesn't know how to do this so you should adopt one of the mechanical methods. When your stock or mutual fund is making that loud swishing noise going down the porcelain container your broker always comes up with the sage advice, "You are in for the long term" or "The market always comes back". In your lifetime?

Take a look at some of the dogs you are carrying in your portfolio right now. Figure out what would have happened if you had put in a trailing stop. My experience of trading for more than 30years has shown that if you had been stopped out that within 60 days that stock will be trading lower than your sell price about 80% of the time.

The first rule of investing is to protect your capital. Use stops.

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.

limo prices to midway Crystal Lake west of Randal .. Lockport Chicago limo O’Hare

In The News:

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

The number of people affected by a UnitedHealth data breach in February 2024 was actually higher than previously reported and was the largest medical data breach in U.S. history.

A phishing campaign uses Google Calendar to schedule fake meeting invitations that appear legitimate, redirecting targets to phishing sites.

Toll road text scam: Fake messages claim unpaid fees, seek payment via fraudulent links. Kurt “CyberGuy" Knutsson says this scam is becoming increasingly sophisticated and widespread.

Kurt “CyberGuy" Knutsson says these steps ensure that your friends and family get to the exact moment you want them to see. Try it out and streamline your sharing experience.

Tech expert Kurt “CyberGuy" Knutsson offers tips on how to protect your identity: Be vigilant, monitor accounts, use smart security, know theft response.

Tech expert Kurt “CyberGuy" Knutsson says cybercriminals are exploiting iMessage phishing protection, tricking users to reactivate links.

It's hard to imagine life without in-flight Wi-Fi these days – but sky-high web surfing comes with its own set of privacy concerns. Here's how to protect yourself.

Over 400,000 cases of credit card fraud were reported in 2024 to the Federal Trade Commission. The CyberGuy explains how to protect against becoming another victim.

A nondescript metal box transforms into a fully functional electric motorcycle that blurs the line between vehicle and urban infrastructure.

Many apps unrelated to location still ask users for tracking permission, and Texas Attorney General Ken Paxton has filed a lawsuit seeking to end this alleged practice by Allstate.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Melody, the artificial intelligence-powered robot, is life-sized and represents a move toward creating robots that resemble people in appearance and interaction.

Here are five easy smartphone rules from the National Security Agency that you can follow to better protect your mobile device from hackers and scammers.

A U.S. robotics company has developed "Jennie," a robotic pet powered by artificial intelligence that's designed to comfort those facing mental health challenges.

Healthcare records for more than 184 million Americans were breached in 2024, but you can take steps to minimize that risk. Kurt the CyberGuy explains.

The Skyrider X1 from Rictor claims to be the "first amphibious flying passenger motorcycle," and it combines land and air travel in one sleek design.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Home inventory and restoration apps help itemize and track every item in your home in the event you have to make an insurance claim after a natural disaster.

The White House launched a new cybersecurity safety label, the U.S. Cyber Trust Mark, intended to help consumers make informed decisions on smart device safety.

Today's tech can help make life so much easier — if you know how to use it. Here are a few tips on the quickest and best ways to make your phone, laptop and other devices work for you.

Tech expert Kurt “CyberGuy" Knutsson offers Windows 11 restart fixes: Update drivers, run system scans and check hardware.

Sony and Honda's Afeela 1 EV launches with advanced tech and entertainment for $89,900. Tech expert Kurt “CyberGuy" Knutsson gives his takeaways.

With limited hard drive space, tech expert Kurt “CyberGuy" Knutsson offers these tips for storing large video files and photos.

Tech expert Kurt “CyberGuy" Knutsson says the $236,000 Yangwang U9 electric hypercar boasts 1,287 horsepower and can jump obstacles.

Stops Make Money

Stocks & Mutual Fund