Keep Your Profits
It looks like we have now entered a new bull phase in the stock market and I have a question for you. Will you give back the profits that you make this time as you did in 2000? You sure don't want to, but you are not going to get any help from your broker.
The investors (Not really the right term. They were gamblers.) had bought stocks and mutual funds during the 90's and seen them have huge advances. They thought they were going to retire early, buy an island in the Caribbean and drink rum and coke all day with no hassels. All of a sudden the bull was attacked and eaten by a grizzly bear. Dreams of comfortable early retirement went up in smoke as the bull was barbequed.
We saw the technology stocks and many mutual funds lose about 80% of their value. Many people did not want to open their monthly brokerage statements and I couldn't blame them. Were there any way those losses could have been avoided? You betcha, but you won't hear that from your broker.
There is what I call portfolio insurance. It doesn't cost any thing and anyone can have it at no charge. Brokerage companies don't want you to use it much less even find out about it. It is a way of protecting your cash from being eaten by that nasty bear.
While the market is going up you don't even think about any financial calamity, but history has shown as far back as you want to look that the stock market goes up and it also goes DOWN. Over long periods of time it does increase at about 6% per year (including dividends and the inflation factor). During the 90's everyone was a financial genius and saw their accounts going up about 12% per year or more. That is not a sustainable pattern. Those periods do occur and are followed by years of declining prices. You don't want to own stock then, do you?
What you have to decide is how much are you willing to give up before you decide to sell. How much of your money are you willing to risk from here where you are right now. Is it 2%, 5%, 10%, 20% or more? In 2000 we saw $200 stocks go down to $5.00. You sure don't want to take that ride again.
After you make your decision you call your broker and tell (not ask) him you want to place a trailing stop loss order of 7% (whatever) on your position. Most assuredly he will try to talk you out of doing it. That 7% (?) is your insurance that you won't have to sit through a 20%, 40% or more down draught.
He will not "watch your account". That is your money not his. If you care about it you are the only one who will watch it. Place your open stop-loss order and keep your profits.
Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know.
10 Tips For Creating Wealth From the Stock Market
1. Do not spread your money too thin.
I Love To Lose Money
Well, not really. What I mean is I don't mind losing a small amount when I have to sell a stock or mutual fund that is going down or taking away the profit I have made. During this past 3 years I have made money each year because I was not afraid to sell. The great secret that Wall Street does not want investors to know is all about selling, not buying.
How To Pick A Mutual Fund
Mutual funds by definition are a mixed bag of stocks, bonds and a little cash. Their price per share is the NAV, Net Asset Value of the total amount of money in the mutual fund divided by the number of shares. They seek to be fully invested at all times.
Making Outsized Returns in the Stock Market - Using the Dow Theory
Look Out The Window
Quick, look out the window. It's raining. No, the sun's out. No, it's cloudy. Wait a second, it is changing again, but I can't tell what it is going to do.
The Exclusive Club of Large Caps
Picture one of those clubs where only the real heavyweights need apply. In the library the old aristocrats, General Motors and JP Morgan, are dozing in their leather chairs. On the terrace, a late luncheon is underway for those who have only improved their standing through marriage. ExxonMobil and Citigroup are part of the party. At the bar, a number of the"nouveau riche" have gathered - Microsoft seems to be buying for Intel and Hewlett Packard. Welcome to the world of the Large Cap Stock Club, the biggest of the worlds publicly traded companies.
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. Unlike purchases made through traditional means, partial or fractional shares, as well as whole shares, are available.
When will the stock market stop going down and start up again? If we knew that we'd all be jillionaires. So what do you do now while stocks are going down and stealing away your money every day?
Every day I hear someone on CNBC proclaim that "this is the bottom" and you should get in there and buy all those "bargains". "The valuations of the DOW stocks are a steal."
When you become interested in a stock or mutual fund you can call your broker and he will send you reports on how the company is doing, what their management is like and what might be the projected earnings for the company and how the industry is doing. Great information.
Mutual funds are doing more and more to discourage investors from leaving them and taking their money to a better performing fund. What does better performing mean? It has nothing to do with who the manager is, what the expense ratio is or how well they performed over the past 5 or 10 years.
How to Make Big Money Safely in Stock Market
(1) Stock Market is Tough Place to Make Any Money Consistently
Prospering with Mutual Funds: How Anyone can ?Afford? an Investment Advisor
Recently I was invited to appear on a live CNNfn television show to discuss my article "How to evaluate Load vs. No Load Mutual Funds." (You can read that article on my website http://www.successful-investment.com/articles21.htm)
Stock Market Diversification
In one of my previous articles (Investing in the stock market -9 powerful tips), tip number one was:
Just 30 years ago the stock market was a shadow of what it is today. There were many fewer shareholders and the daily volume was a fraction of what it is at present. No one thought you would every be able to trade a billion or more shares in one day. Of course that was in the old days when they had tickers and the word digital was something you did with your fingers.
Reach in your pocket and take out that big roll of bills. Depending on how many of them you have you feel pretty good. BUT did you know they are not worth the paper they are printed on? Huh? Let me explain.
Successful Trading ? Taking Profits - Part 1
So you're started trading, you bought some positions with your online broker, you've set some reasonable stop-losses to protect your account and all of a sudden one of your positions move strongly in your favor ? so what do you do now? This my friend, is probably the hardest situation to deal with in trading the market ? believe it or not.
For the year 2000 we have seen hundreds of mutual funds lose 40%, 50% and more of their value. This does not seem right since the fund is supposed to be managed by a professional. How can this "professional" do such a bad job? More than half of the funds this year will not out perform the S&P500 index which closed down about 10%.
Some Good News for A Change
Before we get into all the good news out there, let us first take a look at what the term "news" really means. By definition, the term "news" means the exception to the norm. If it is expected to happen then it is not news. If it differs from the norm, then it is news.
Traders, Defend Against the Dreaded Death Spiral.
It has often been said that there is only two ways to get hurt really bad on a stock trade, getting caught in a "death spiral" by not using DTM: Decisive Trade Management in the way of stop loses and having a stock halted on you. Halts you have zero control over. Death spirals are of your own making if you do not practice the use of stop loses.
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