|Stocks & Mutual Fund Information|
Trading vs Investing
I often hear from people, "I don't trade. I invest. I buy a mutual fund and I hold it". Mr. Investor, did you know you are trading on a regular basis? Are you aware that mutual fund managers are changing their positions by selling certain stocks and buying others?
Mutual funds must report quarterly what stocks they are holding. You can get those reports if you want them. I can't see where it will do you any good if you are going to blindly hang on to the fund.
A few professional traders will request these breakdowns only if a fund is greatly outperforming the market. They will see what stocks the fund manager has that is making this fund do so well and may buy those stocks. Very clever.
Did you notice that the investor is only looking at the best funds and not at the underperformers or the average performers? Now check your portfolio. Is what you own in the top most profitable funds for the past 3 or 6 months?
I know your broker told you that you have to look at the returns for the past 5 or 10 years. What nonsense. Do you care what the fund has averaged for the past 5 or 10 years or do you want to own one that is making money now?
Fund managers are constantly trading trying to increase the return for their investors. It is a shame most of them have not done a better job. They are always comparing themselves to the S&P500 index. When they do that well they think it is wonderful and they never stop bragging.
The S&P500 index is an average of the market. Mr. Fund Manager gets excited doing an average job. Does your boss like it when you are average? He expects more from you. And you should expect more than average from any investment you make especially if it is recommended by an "expert" broker or financial planner.
If anyone does an average job he will be employed until the boss finds someone who will do a better job and then Mr. Average can find the door. That should be the same way you examine the stocks and funds you own. The nonperformers should be sold and new ones found that will make money or go to cash. Don't rely on your broker. His company never wants you to sell.
Investors who buy for "the long haul" are long term traders. They are not knowledgeable enough to sell when the market is going down as it did in 2000. When there is nothing to invest in then cash is the best position you can have. Having your portfolio in cash in a one or two percent money market account will many times outperform owning stocks or mutual funds.
Everyone who invests is a trader. It is only the time period that is different.
Al Thomas' best selling 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 to receive his market letter for 3 months at www.mutualfundmagic.com to discover why he's the man that Wall Street does not want you to know.
Overseas Investing: Going Against the Mainstream
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This strategy works in the short term, but can lead to difficulty in the longer haul. It also prevents investors from finding the great opportunities that experts have missed.
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.
Selling Strategies - Setting a Stop Loss
Sometimes the best way of lowering exposure to risk is not to invest at all! However, when we make the decision to jump into the muddy waters of the stock market, its always a good idea to have a life jacket ready, just in case.
Duck! No I don't mean a quack, quack. I meant get down, look out for a huge blob of brown stuff is heading your way.
Protect Your 401K
Checked your 401K lately? Going back to about a year ago many of these retirement accounts have shrunk by 30%, some even more. What Happened?
Whitewater Stock Market
Ever done any whitewater rafting or canoeing? Long periods of tranquil river followed by short periods of terror. Suddenly the water grips your vessel and you are pushed and shoved by massive currents over which you have no control. Missing boulders you paddle as hard as you can. You almost lose everything and think to yourself, "Why didn't I portage that last rapid?"
Trading Tips No 5: Stock Trading Curve Drawdown and Commitment
All stock trading and investing methods must deal with the inevitable drawdown from the most recent peak in one's stock trading curve to a bottom before reversing and making a new high. Seasoned systems traders are well familiar with the drawdown phenomenon and the importance of drawdown as a percentage of annual average returns in evaluating a trading system. On the other hand, many "investors" that follow a "buy, hold and hope" approach to the markets for the long term, don't think in terms of a drawdown when their portfolios drop in value by 10%, 20%?75%, as has happened in the past few years. But what they have experienced is an stock trading curve drawdown.
A Common Misconception about Stock Prices
I cringe every time I hear a novice investor tell me that they only purchase low priced stocks because they offer higher potential gains. A common phase I hear is "I like to buy $1 and $2 stocks because they can double easily and I will make a 100% profit".
Stock Valuation using the SMP Model
Disclaimer: Please note that I do not necessarily purchase, own, or partake of any of the securities or other financial instruments mentioned in this article. I also do not take any responsibility for any actions resulting from any actions taken by anyone who reads this article. You are responsible for your own finances - no one else. Do your yown due diligence when researching financial matters.
Buy Low - Sell High
Now where have I heard that before? I know. It was my broker.
An insane person cannot evaluate an insane evaluation system.
The POWER of a Proven Stock Investment Plan
When you invest in the stock market for ever-increasing cash dividend income, verses trying to make a buck in the stock market, your mindset will change. There will no longer be a fear of losing money in the stock market. With the right type of investment plan and investment choices all worries of losing money in the stock market will disappear.
The Seven Mistakes All Novice Traders Make and How to Correct Them
We learnt the following the hard way! If any of these things applies to you, don't worry ? there is an easy solution!
As an investor you will want to check out any equity before you buy it. Many investors go to Morningstar that is one of the largest providers of mutual fund information in the world. It is assumed that their information is correct. After all that is what you are paying for.
One of the basic laws of physics states that a body in motion will continue in motion in the direction it is going until interrupted by another force.
Swing Trading Strategies
Using Swing Trading Strategies and Technical Analysis when Trading Stocks to Make Consistent Trading Profits.
Struggling Stocks, Booming Commodities
Alfred E. Newman
What! Me worry?
Buying Stocks and the Importance of Correct Timing
An investor can find and research the best stock on the market, one with huge potential but if the general market indices are negative, it will most likely be the wrong time to buy. A stock with tremendous accelerating earnings, rising sales, an up-trending chart pattern and a strong industry group may sound excellent to buy but will mean absolutely nothing if the market is positioned to move in the opposite direction of your expectations. As soon as a stock is purchased, the time comes for an investor to make a decision to hold or to sell. If the position shows a profit, hold as your judgment is correct. If the position shows a loss, cut it quickly and don't rationalize the situation before it doubles in size. Timing will play an important role in determining if you are right or wrong.
The 1% Solution
You probably know the story of Sherlock Holmes and the 7% solution. He had a drug addiction. He needed the drug. He was able to control his addiction by taking the drug in a 7% concentration. Anyone with common sense knows you cannot survive on 7%. It is a slow death.
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