| |
| |
|
Stocks & Mutual Funds Information |
|
|
|
Evaluation II
As I said in Part I everyone in the insane asylum looks normal, but at least the doctors are sane. Unfortunately, in the insane asylum known as the stock market all the doctors (brokers) are also insane. The doctors in the insane asylum went to medical school to learn how to treat the patients so the could get well. On Wall Street you go to the doctor (broker) who is supposed to help you become financially well, maybe wealthy. Almost none of these Wall Street experts ever learned their profession. They have all been taught the three great prescriptions that make no sense at all: Do Your Research, Buy and Hold and Dollar Cost Averaging. This is what the brokerage houses teach. As I said previously research is worthless, as it will not tell you if a stock is going to go up. Buy and Hold is taught the wrong way. It is OK to Buy and Hold as long as the stock is going up, but not when it goes down. No broker is taught how to protect a customer's money. When I was a floor trader I learned in a hurry not to hold on to something that was losing money. The very simple prescription for this is called a Stop Loss Order. Brokers hate them and will discourage you from entering them. Why? Because it means he will have to watch your account because if a stop order is not properly and timely executed he must pay it out of his pocket. Brokerage houses do not teach brokers how to use this simple method to protect capital. The house does not want to become known that it will sell a company's stock when it turns weak. The brokerage company makes more in good will from the poor performing company than they do in commissions from you because if they ever encourage selling it means they will not get a chance to handle an Initial Public Offering (IPO) for that company. Suppose they did have a stop protection policy for customers and they then had an IPO that came out at $30 per share, but instead of going up it went down. The customers would not lose more than $3 or $4 per share because of their protective stops, but the house would then be stuck with all the unsold stock. It is OK for you to have this money-losing dog, but they sure don't want it in their inventory. You can see how logical this is, but you won't hear it from a broker. Stop orders are not insane. The insane conventional wisdom that both brokers and customers have been taught cannot remain once it is exposed to truth. You must take the initiative with the stocks you own to protect yourself from loss of capital. If your broker argues with you there is one solution - fire him and find a good broker who will protect your money. Just because he has learned an insane system doesn't mean you have to be nuts too. 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. Copyright 2005 al@mutualfundstrategy.com; 1-888-345-7870
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Investing in Trash Company Stocks Refuse is a serious issue in any society, about as serious as cleaning the water and air, even more so to some degree, especially if you study your history with regards to the plague. This is why it is considered one of the better long-term hold stocks to have in one's portfolio. Emotional Involvement I'll bet with almost anyone that has stocks or mutual funds in his portfolio that he has losers, but he won't sell them because he "likes them" or some similar excuse. This is the philosophy of a loser. 8 Penny Stocks to Avoid There are many good penny stock investments available, which could turn a small amount of capital into a small fortune very quickly. However, to discover these you need to know what to look for and what to avoid. The Stock Market - How Just One Question Will Tell You All You Need To Know About Your Stock Broker Last time we looked at the real performance of the stock market (we used the Dow Jones as a reference point) and the apparent performance that makes the headlines and can be seen by a casual look at a chart or "ballpark" figures - briefly; the Dow went up, for example, less than 50 points between April 1999 and April 2005 - essentially 6 years with no growth!But behind that seemingly "becalmed" Dow there were at least 10 significant moves each and every year totalling many thousands of points!But did the Wall Street Moguls, the so-called "Masters of the Universe" make you any money from those huge movements?No.Of course they didn't!Here's how I know. Bad News is Good News For weeks, no, months we have been bombarded with nothing but negative news about the economy in general and thousands of individual companies. The stock market has dropped thousands of points and more than $8 trillion in paper assets have disappeared. Evaluation I An insane person cannot evaluate an insane evaluation system.As you know I have been trying to restore sanity to the insane premises Wall Street has been teaching its brokers and you for all these years. Stock and Fund Dividends When is a dividend not a dividend?The latest thing "conservative"brokers are preaching these days is to buy stocksthat pay dividends. Everyone likes dividends. 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. Hedge Funds: the Good, the Bad, and the Ugly Alfred Winslow Jones started hedge funds in 1949. He was a pioneer of non-traditional investment strategies. How to Evaluate Load vs. No Load Mutual Funds If you have been dealing with mutual funds for any length of time, you undoubtedly have faced the question of which is better: Load Funds or No Load Funds. If you are new to investing, "load" simply refers to the commission paid to the broker selling the fund. 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. 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. Choosing An Investment Stock Broker If you want one.And I don't recommend any broker with whom to trade who will be giving you advice on what to buy and sell. How to Short Stocks? How to Make Money when Your Stocks Go Down by Shorting The stock market can present you with a lot of hot stocks every day. Many of them are new technology stocks that come from the nanotech, biotech, voip, healthcare, homeland defense or internet sectors. Can't Stand The Heat It seems that every day I turn on the TV and find a Poker game. Texas No Limit seems to be all the rage these days. Analysts - Do They Really Know The Stock Market? When you become interested in a stockor mutual fund you can call your broker and hewill send you reports on how the company is doing,what their management is like and what might bethe projected earnings for the company and how theindustry is doing. Great information. Making a Stock Watch List I am taking the time to help others learn the basics in evaluating stocks for investment using both fundamental and technical analysis. Both tools are equally important in making serious decisions with your hard earned CASH!If you wish to invest in stocks, treat it like a business, NOT A HOBBY. Its A Bull, Its A Bear, Its Suptertrader! The higher the market goes the more confusing are the "experts". In the September 14 issue of Investor's Business Daily newspaper we find the great prognosticators such as:Sheldon Jacobs, editor of No-Load Fund Investor newsletter quoted that he is recommending having more cash in your portfolio. Emotional Maturity If you are going to be a winner in the stock market you must have emotional maturity. I did not say you had to be smart or know how to pick stocks and mutual funds. 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!MISTAKE ONELack of Knowledge and No PlanIt amazes us that some people expect to trade the stock market successfully without any effort. Yet if they want to take up golf, for example, they will happily take some lessons or at least read a book before heading out onto the course.
|
| home | site map |
| © 2006 |