| |
| |
|
|
Stocks and Mutual Funds |
|
Stock Market Insanity
Let's first define insanity. It is doing the same thing over and over and expecting a different result. And that is what most investors do and they can't understand why they are not able to make money in the stock market. Do these investors need a psychiatrist, a psychologist, a talk with their minister or none of the above? I know, you think they should talk to their broker or their financial planner. Believe me, folks, these two are part of the problem and not the solution. If they knew the answers everyone would be rich. Let's go back and look at who taught these mavens how to invest. The Wall Street brokerage houses taught them or rather did not teach them the most basic rules of the game. Why? Because brokerage houses want you to buy (for commission) and they do not want you to sell even though that means another commission. There are two basic reasons they don't want you to sell and it has nothing to do with that one selling commission. If you sell you might take your money out of your account and that is one of the things the Maul Street crowd never wants to happen, but the most important is they make money when your account is invested. It is not a lot, but it in a nice steady 1% or more. You are their unspoken collateral in the worldwide money shuffle. Any broker who suggests a customer sell is usually chastised in some way or just plain fired. A broker who allows large sums of cash to accumulate in customers accounts is told to invest (?) it or hit the road. The house (that's the brokerage firm) does not want to see customers with big cash balances although there are times when that is exactly where they should be. Remember 2000 to 2003? During that three year period wouldn't it have been better for your account to have had no stock or fund positions? Brokers or financial planners are not taught simple methods to protect customer funds. And I mean simple. Too many folks during the 2000 debacle lost 40% of their money and more. There was absolutely no reason for this if basic money management techniques were instituted. Customers could be made aware that they should not give back more than 10%, maybe as much as 15%, of their portfolio value when the stock market goes in the tank. That occurs on a regular basis. Declines in equities of 20% to 40% happen regularly and no customer should be mesmerized into holding during those periods. During the 2000-2001 period there were less than 3% recommendations by brokers to sell and those sells were after the stock had crashed about 80% to 90%. It is too late then. Your money is gone. If brokers and financial planners had been taught to advise people to place 10% stop loss orders their retirement accounts they would be much fatter today. Stop doing the same thing over and over again because of bad advice. Learn to sell when your position goes negative. Don't be one of the insane. 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 al@mutualfundstrategy.com; 1-888-345-7870
MORE RESOURCES:
Stocks-Mutual-Funds - Google News |
|
|
|
RELATED ARTICLES
No Load Mutual Funds: Boost Your Portfolios Returns Investors who exclusively use broadly diversified, no load mutual funds for their stock investments often lose out on opportunities to increase the reward potential of their portfolios. This article looks at two methods investors may use to enhance the performance of their portfolio of diversifed, no load mutual funds. Online Investing & Online Stock & Share Trading: Difficulty in Taking Stop Losses in the Market This is an extract of an article which was first printed in Daryl Guppy's Newsletter Tutorials in Applied Technical Analysis on 26 March 2005 and is reprinted here with his permissionA stop loss is a predetermined exit point. When a trade is first planned, the stop loss is designed to protect the trader's capital. Diversification Wall Street's watchword has always been diversification, but what does it mean and why do they say it?The standard Wall Street definition is flexible because each broker or financial planner will vary the portfolio based on your age and income. They say that the younger you are the more risk you should take and the older you are the less risk. Trading For A Living - Part 1 There can't be many traders who haven't at least considered the idea of telling the boss what they think of him, throwing it all in and going off to trade the stock market for a living. It's a big risk financially, and that uncertainty is what stops most from jumping ship. Pamplona, the Wild Investment Bulls You remember (they show it on TV every year) the running of the wild bulls in Pamplona, Spain. Some of the nuttier people get out their capes and stand in their path as they come roaring down the street. Take The Time You must take the time once a month to review your investment portfolio. It won't take long - less than one hour, maybe 15 minutes. Understanding the Bulls and the Bears If you've ever flipped on the television to CNN Financial or paged through the finance section of your local newspaper, you may have seen or heard references made to "the bulls and the bears." If you didn't know what was meant by those terms, you're about to find out. Never Lose Money Never lose money in the stock market again. Yeah, I know. Your Trading Objective: Why is that so Important? You've decided to try your luck at trading stocks or commodities, but so called experts tell you that you need to determine your trading objective. What exactly does that mean and why is it so important? Well, it's really a question of your trading philosophy. The 401(K): How The Insider Has Stolen Your Retirement! Mutual funds were moderately successful in creating a presence in the stock market until the advent of the investment retirement account and in particular the 401(k). Corporate insiders persuaded the federal government to allow for the 401(k) in lieu of offering employees the traditional pension. Index Fund Trading Using Technical Analysis and Swing Trading Strategies Index Fund Trading can be one of the most profitable.. Advisory News Letters Several times each month I am solicited by various market touts who have a newsletter service, faxes or emails they are willing to send me to make me rich. That sure is nice of them. Stock Market Investing Odds The greatest stock market myth is the idea that investing in stocks is a form of gambling!The financial markets are often compared to a casino. Put some money on X stock and you might as well be playing craps!If that's your impression, and it's keeping you out of the markets, consider this: If investing is organized gambling, it's one of the rare kinds where the odds are stacked in your favor!Why is that?Corporate profits are the key to understanding the investor's edge. Trading vs Investing I often hear from people, "I don't trade. I invest. Trapeze Artist - Swinging with the Stock Market When we go to the circus we see a trapeze artist working on a high wire or swing either alone or with other athletes. They know what they are doing because of constant practice, but every once in a while there can be a mistake, even a small one that can cause one of them to fall. Small-Cap Stocks: The Beginning of the Journey When an individual investor wants to roll up his sleeves and do some research in the pursuit of the next big winner in the stock market, the place many start is in the small cap sector.As with the other capitulation sizes (capitalization is a stock's market value), no one can completely agree on a precise definition, but corporations under $2 billion are often considered small caps. Successful Trading - Establish Your Risk Level Before you embark upon a journey of trading stocks or futures, and before you make any trades, you MUST determine and establish your risk level. Traders that fail to do this are usually doomed from the start. The 10 Commandments Wall Street has been preaching for years and years to investors how and where to put their money. The "experts" have put forth these ideas for so long that they seem to be carved in stone just like Moses did with God's 10 Commandments. Shorting Stocks - The Basics, Part I of II What does it mean to short a stock?This means that you borrow the stock from your broker to sell to a third party. The idea is to buy back the stock at a lower price, returning the shares to your broker while leaving the remaining cash in your account as a profit. Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading? Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I've noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals.
|
||||||||||||||