| |
| |
|
Stocks Mutual Funds Investing Information |
|
|
|
The Great Stock Market Secret
When the stock market is going up and all your stocks and mutual funds are making money you feel like a genius. It is too bad that some folks don't remember what happened in 2000. Of course, right now we are in one of those genius phases. Your broker and financial planner are encouraging you to buy, buy, buy. And I can't fault that at this time. You remember back in 2000 how many times they told you to buy, buy, buy while the market was going down, down, down. Are we in another of those periods now that are leading up to a humongous crash? Hey, I don't predict, but I do listen to the voice of the market. The great Wall Street mantra is "buy a good stock and put it away". Did you keep WorldCom and Global Crossing? Even if these were exceptions because of fraud a smart investor would not have lost any money. In fact he could have made a nice profit. But Al, they went under! Yes, I know, but the smart money still made out because they sold near the top. As a former exchange member and floor trader I was not right every time I bought something and I especially did not like giving back nice profits that had accumulated. You don't have to be psychic to know when to sell and don't think you are going to be able to pick the top. A really smart trader waits for a stock or fund to start up and then jumps on it with both feet. When it starts down he jumps off looking for another equity that is going up. The wise trader knows he can't buy the bottom and sell the top. What he wants is a big bite out of the middle. When you make a sandwich most of the meat is in the center and a professional trader does the same with his trading. He wants to take a bite out of the middle of the move. You can do this too by looking for stocks, mutual funds or Exchange Traded Funds that have a nice upward pattern. As I said before buying is not the secret. Then what is? You must learn to sell - for two reasons. First to protect your equity after your initial purchase and second to keep from giving back profits you have made as the equity advances. The great Wall Street secret is an exit strategy: knowing when to sell. Unless you learn to sell you will not be successful in the market. Brokerage companies do not want you to sell and rarely issue sell signals. You must decide how much you are willing to risk before you buy. The simplest way is with a percentage stop loss order of 5%, 7%, 10%, 12%, whatever you can live with. Instruct your broker to place a trialing stop or you can change it yourself every week. Do not lower a stop. Selling is the great secret you will never hear from your broker. 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
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
The Information Age It is wonderful to be alive in the information age. We know in a matter of seconds the change in the value of gold in Switzerland, the death of a world leader or the birth of a peasant in Israel. What Are You Waiting For? Do you own any mutual funds? In an IRA or 401K or wherever. Privately or at work. Gold Fever Right now there doesn't seem to be any "gold fever". Very few are out looking to strike it rich in this sector. Zero Sum Game Most people think the stock market is a zero sum game because there is a buyer for each seller and seller for each buyer so each cancels the other and everything is equal. Not quite. Dividend Reinvestment Plans: Investing on Automatic Pilot If you're like many investors who squander those small dividend checks from your stock portfolio, a Dividend Reinvestment Plan (DRP) might be just what you need. Just as its name implies, a Dividend Reinvestment Plan allows you to reinvest some or all of those dividends into more stock of the issuing company. Ignore Stock Market Talking Heads You should ignore analysts on TV, the radio, the newspaper and all other TALKING HEADS when it comes to investing! What stocks do they talk about? - The same old group, every day of every year - Why? Because they don't know any better, they are sheep like the general public, repeating what every economic textbook says and every other economist tells them to say. Everyday, the same companies are highlighted on the evening news -WHY?They aren't going anywhere. Attitude Is [Almost] Everything I often play a little game with myself when I have to go shopping; to the post office or on other errands.Sometimes I will just go about my business and make little comment or eye contact with the person serving me. Mutual Funds are Dead You may have wondered why your mutual funds have been going down for the past 2 years. The answer is very simple, but not one you will hear from Wall Street as they want you to send money. Is Active Trading The Answer? One of the main reasons many of us get into investing is to become financially independent. Who isn't trying to amass a portfolio with enough income to ensure that we don't have to work when we should be playing golf or traveling the world. Inertia One of the basic laws of physics is that a body in motion will remain in motion unless disturbed by another force. What has this to do with the stock market?For the last 2 years the long-term trend of the market has been down with a few momentary deviations. Mousetrap The spring-loaded rat catcher is the ultimate low-tech device invented more than 100 years ago and remains the best demouser in the world. It is so simple anyone can master it and best of all you can keep on using it year in and year out. Option Trading Basics Options trading can increase the profits you make when trading Stocks if you understand how to use them and know what you are doing. Options can be a very useful tool that the average investor can use to enhance their returns. You Wont Like This Why? Because I am going to shatter your conventional wisdom as I have many times in previous columns about the lies that Wall Street continues to tell you. This time we are going to go deeper into the economy to unearth the truth about lies the politicians are telling you. Price Targets Every day in any financial publication you will find the Wall Street mavens giving their predictions on many stocks. It was issued here and should go there. Expense Ratios Mutual funds and brokers are always preaching not to buy any fund with a high expense ratio. That is the annual costs of the fund to pay for trading of stocks within their portfolio, salaries, rent, telephone, analysts, etc. The Value of Stocks of a Company The debate rages all over Eastern and Central Europe, in countries in transition as well as in Western Europe. It raged in Britain during the 80s: Is privatization really the robbery in disguise of state assets by a select few, cronies of the political regime? Margaret Thatcher was accuse of it - and so was the Agency of Transformation in the Republic of Macedonia. The Importance of Using Stop Loss Orders When Spread Trading the Financial Markets A Guide to Using Stop Loss Orders Stop losses are market orders designed to allow you to limit your losses.When you place a stop loss you are instructing the spread betting company or stock broker to cut your position when it reaches a certain loss level (or in some cases, profit level - more later). Is the Stock Market for You? Many people would like to diversify their portfolios to expand their holdings. Making it big in the stock market has been a dream for many people who want to strike it rich. Complacency During the month of January the Dow Jones Industrial Average, usually referred to as the DOW, had an almost 1,000 point range, most of it down and the average investor has yawned and said 'so what, this has happened many times before'.Is there any reason to worry now?The terrible event of September 11 shocked investors who sold heavily and then watched the market climb back to where it was on September 10. Mindset In 1960 an engineer working for a watch company in Switzerland discovered that a small crystal would vibrate at a constant rate. He found this was so accurate that it could be used to calibrate time so he took it to company management and said it would make an entirely new kind of watch that had no springs and no gears.
|
|
|
|
|
Home | Index | SiteMap | Click here for Indian Share Market Tips |
|