I am sure that if you have a brokerage account with a "full service" broker you have been getting calls about what to buy and sell. If you have big losses in certain stocks you might be hit with that great Wall Street lie to buy more so you can 'Dollar Cost Average'. It doesn't work.
In a recent study going back for 5 years a dollar cost averaging program was set up buying the S&P500 Index mutual fund. At the end of 62 months the investor had put in $31,000 and it was now worth $31,162. You would have done better in a savings account at your bank. And that assumes there was no commission or fees of any kind.
Let's say you owned a stock such as Cisco. This one is held by hundreds of thousands of investors and almost every one of them has a loss. It traded as high as $82 and for more than a year was in a range over $50/share. It was the darling of very broker from here to Timbuktu and when it started down they kept yelling buy more, buy more. Another one in this same category is Lucent going from about $80 to $5. Yuk!
Now Wall Street is trying to get you to buy more of these losers so you can "get out even" when it goes back up. And pigs can fly. Think about this. The person that currently owns these stocks or any similar ones with big losses is now waiting for them to go back up so they can "get out even". Ho boy. It should be extremely obvious that every time one of the monsters sticks its head up it is going to be hit with tremendous selling. There isn't a chance that any of them will ever get back to their old high prices ? or even close.
What does an investor do? Clean out your garage and have a yard sale. Get rid of this junk and put your money to work where there is a chance to make a profit. And don't buy any stock that has lost 50% to 80% during the bear market of the last 2 years. Brokers will tell you these are now "cheap" and are a good buy. Not a chance. There are too many people waiting to sell.
Now is the time to try to find a completely different equity that did not get hammered last year. Look for one that has a nice smooth upward pattern. Buy it and this time know how much loss you will be willing take if it goes down. How do you do that? Very simple. Use a trailing loss limit order called an open stop-loss order about 10% under the lowest price of the previous month - and keep moving it up as the price advances. That way you will not give back profits.
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 carThe recent criminal fiasco in the mutual fund industry is... Read More
Analyzing growth stocks is an important focus for any investor.... Read More
The Surgeon General of the United States says that smoking... Read More
04/28/2005NASDAQ dropped -12.5% year to date in 2005. S&P500 index... Read More
Never lose money in the stock market again. Yeah, I... Read More
Most stock traders know that momentum trading can be a... Read More
Carefully thinking through your goal as a trader is of... Read More
On Friday or Saturday evening my wife gets a movie... Read More
Hello Inflation, it has been awhile, I see you on... Read More
When you invest in the stock market for ever-increasing cash... Read More
There is so much involved in developing peak performance, that... Read More
Hedge current portfolio positions and gain access to capital resources... Read More
The higher the market goes the more confusing are the... Read More
IT'S REMINISCENT OF THE OLD children's tale about an old... Read More
One of the great "secrets" of successful people is discipline... Read More
Outlined below are some of the advantages and disadvantages of... Read More
Just about everything you have been told about Social Security... Read More
If it walks like a duck, quacks like a duck... Read More
Sometimes the best way of lowering exposure to risk is... Read More
Alfred Winslow Jones started hedge funds in 1949. He was... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
We are already in it, but you can't see it.... Read More
How is it possible that trash Companies are posting less... Read More
For years I have been saying you must have a... Read More
Investing in long-term financial vehicles give you the most gains... Read More
O'Hare Chicago prom limo ..How do you make money without picking tops and bottoms?I... Read More
'Sector funds are too risky.' 'I doubled my money with... Read More
What the heck am I talking about?It is often said... Read More
Have you bought any mutual funds this year or late... Read More
If you're a normal human being, your need to feel... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
As an investor you will want to check out any... Read More
Dollar cost averaging is one of the most popular ideas... Read More
Last time we looked at the real performance of the... Read More
We all know the expression, "My country, right or wrong",... Read More
In his wonderful book, 'Multiple Streams of Income', best selling... Read More
How do you invest? What do you really pay? At... Read More
Do you have a nest egg? You know, a place... Read More
When it comes to stock market trading it PAYS to... Read More
When it comes to 401k's there is an overabundance of... Read More
If you go to Haiti or other places in the... Read More
As an investor you will want to check out any... Read More
Forget making a profit; instead focus on the income provided... Read More
Mutual fund investing is a lot like Thai cooking. Everyone... Read More
As I have said many times before in this column... Read More
A few years back ? it seems like an eternity... Read More
Are you one of those many people who dread reading... Read More
Spread trading is a technique that can be used to... Read More
Most advisors will tell you they can beat the market.... Read More
How many people went to a cash position this week?... Read More
Stocks & Mutual Fund |