The recent criminal fiasco in the mutual fund industry is being used by Wall Street to persuade investors that market timing is a bad thing. The late trading by Janus, Bank America and several other well known mutual funds is falsely being called market timing.
Wall Street, better known as Maul Street to most investors, does not want to you to find out about market timing. The reason is very simple. If you learn to sell you might take your funds and do something intelligent with them.
First let's understand what market timing is. Very simply it is a proven method that gives signals to buy and another signal to sell. Many of these methods are associated with stocks and mutual funds yet there are those that signal overall market conditions. We are on the verge of another sell signal for the general market and several market timers have already given those signals to sell. There are many excellent systems and they all beat the Wall Street lie of Buy and Hold. The key to all market profits is selling not buying.
The criminal acts of the mutual funds had nothing to do with this method. The hedge fund managers knew the stock holdings of the mutual funds in question and AFTER the market closed companies would make announcements of their earnings, new products approved by the FDA, legal actions, etc. that would definitely impact upon the stock price the NEXT day. If it was good news the fund would allow big money players to place their orders after all official trading stopped. That's 4:00PM New York time.
The fund price might be $20 per share, but depending upon the amount of stock in their portfolio it might make the settlement price the next day as much as 5% higher. That doesn't seem like much, but if you had shown a purchase of 10 million dollars on the close that day and sold it out the next day you would have a profit of $500,000. That is money removed from the fund that belongs to the shareholders. This is NOT timing. This is fraud and the parties should not only repay all those stolen monies to the fund, but should also see jail time and be banned from the industry for life.
If you want to find out more about market timing type in 'market timing' on your computer and do a search. There are scores of them, but you must do your due diligence to be sure that what they are telling you is true. Always ask for references. Make them prove what they say. Don't bother to ask your broker as he will tell you the Wall Street lie that it doesn't work.
Because of the precarious nature of this market I encourage you to look into this NOW.
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.
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 -
It has fallen upon the consumer to make our economy strong. All the politicians, economists and talking heads on TV are telling him (that's you and me) to get out there and spend your money. Buy that new car, build a new house and fly off to some remote place for an expensive vacation.
Did you run out to buy that duct tape yet? Don't forget the plastic sheeting, bottles of water, canned food and a couple of books to read. What are you waiting for? I know - things to get better so you can resume your normal life style.
Boiler Room 7/17/00
On Friday or Saturday evening my wife gets a movie from Block Buster and after dinner we sit, hold hands and watch. This week she brought back one that I think every investor or anyone contemplating investing in the market should see. It is called "Boiler Room".
Nest Eggs and Omelets
Do you have a nest egg? You know, a place you are stashing away money for the future - retirement, down payment on a house, the kids education. That kind of thing. How're you doing?
Investing in Stocks and The Game of Monopoly
To begin, you might look at playing the stock market as though you were playing a game of Monopoly. That's right; for playing the stock market 'game' is not unlike playing a game of Monopoly. There are definite comparisons and parallels.
Price to Earnings Ratio - P/E
After finding the price of a particular stock, usually the next number everyone looks at is the P/E ratio.
Stock Market Diversification
In one of my previous articles (Investing in the stock market -9 powerful tips), tip number one was:
Stock and Fund Dividends
When is a dividend not a dividend?
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.
Defining a Long-Term Investment in the Stock Market
For some "long term" would mean holding a stock position over the weekend. For others, it may mean holding a security for at least 1 year for the purpose of declaring a long-term capital gain, thus saving on taxes.
Frog In The Pot
You remember the story about the frog that was put into a pot of cold water on the stove. Hewas not concerned. Someone lit the burner andthe water began getting warm, the frog was verycomfortable and as the water became warmer hewas so relaxed and complacent that he fellasleep ? never to awaken.
Laws and Efficiencies and Theories of Diminishing Returns
The basis of diminishing return discussions surround such simple notions; that when you have a very fast aircraft, you also have coefficients of drag issues. When you are building a quarter mile car and want to go faster you must realize that for every tenth of a second you need to lose 100 lbs., but to go faster you also need more power, thus the problem in Einstein's theory of the threshold of speed being that of the speed of light. In aviation there is a hyperbolic curve with coefficients of drag that makes aircraft design nearly obsolete when dealing within the boundaries of the atmosphere with the relationships of time, speed and distance equations.
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.
Overvalued & Underbought
With all the bad news that has been dumped upon the economy for some reason the stock market is going up. Why?
Dont Buy Stocks based on P/E Ratio alone
I use the P/E ratio as a secondary indicator for buying and selling stocks but I don't use the ratio in the same a manner as many value investors teach. I will explain the difference in my methodology for using the P/E ratio to your advantage.
The Inside Scoop on Mutual Fund Rip Offs
The bear market that showed up at the end of 2000 has every brokerage house-as well as the entire mutual fund industry-scrambling to find creative ways to boost both their image and bottom line. Unfortunately, this is often at the investors' expense.
You have a lock on your house. You have a lock on your car. You have a lock on your tool shed. Do you have a lock to protect your stock market investments?
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 permission
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.
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