How many people went to a cash position this week? There is no question that this market has scared the bajebers out of many investors, me included. Fortunately, I started going to cash some time ago, but I did give back a substantial amount of my profit.
Your broker never wants you to be in cash. You might take it out or invest it in something else. "Don't worry, the market always comes back." Yes, and pigs can fly. Fund managers are even worse. Because I recommend selling out temporarily and going to cash does not mean I don't have a long-term program. It means I don't want to participate in a down market. CASH IS A POSITION. It is the same as owning Vanguard Index 500 when the market is going up and being in a Money Market Fund earning interest while the market is going down, but not losing your principle. Make sense?
Brokers will tell you over and over that you cannot "time the market". WRONG. Just because they are not smart enough to do it does not mean it cannot be done. I have been doing it for years and have never been caught in a bear market. Even the Federal Reserve Board published a paper saying that "market timing" works. There are timing programs or services that can be bought that are very simple and easy to understand. To protect your retirement funds you must have this in place.
In my column last week I called the market a Stealth Bear. It looks like it has come out of its den. You don't want to be around when the bear is running loose. It can hurt you.
During this past few weeks we have seen some tech stocks lose 80, 90% of their value, but how about good ole Proctor & Gamble dropping 30% in one day? That is a stock held in a high percentage of retirement portfolios and hundreds, if not thousands, of mutual funds. It is going to be a long time before we see new highs in the Nasdaq Composite and the reason is very simple. There are people and fund managers who own many stocks that they would like to sell to get "even". Know anyone like that? This effectively puts a cap on any resurgence back to the top.
I have no idea if the market is going to go lower, but the tendency is toward more selling, not buying. This is a good time to have a position called CASH.
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
http://www.mutualfundmagic.com; 1-888-345-7870
Beecher limo rentals ..Intervention. Now don't let that big word scare you. The... Read More
For the year 2000 we have seen hundreds of mutual... Read More
For weeks, no, months we have been bombarded with nothing... Read More
As I said in Part I everyone in the insane... Read More
Checked your 401K lately? Going back to about a year... Read More
The Dow Theorycharles h. dowcharles h.... Read More
Is really not as important as to how you invest... Read More
Right now there doesn't seem to be any "gold fever".... Read More
A few years back ? it seems like an eternity... Read More
When we go to the circus we see a trapeze... Read More
You probably know the story of Sherlock Holmes and the... Read More
If you want one.And I don't recommend any broker with... Read More
Success in small cap & micro cap stock trading like... Read More
It is finally catching up with them. The brokerage companies... Read More
Regardless of the fact that the world's stock markets have... Read More
In 1960 an engineer working for a watch company in... Read More
The following are a list of nine things you want... Read More
What does it mean to short a stock?This means that... Read More
(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More
We keep hearing about this bear market and that the... Read More
You have decided to buy some stock or mutual funds,... Read More
Are you one of those many people who dread reading... Read More
All stock trading and investing methods must deal with the... Read More
Among the largest forces that affect stock prices are inflation,... Read More
If you are fed up with early redemption charges and... Read More
Bridgeview limo Chicago ..If you have been dealing with mutual funds for any... Read More
If you are a baby boomer, time is not on... Read More
There are major differences between trading stocks and trading futures.... Read More
If you were to find that you had some severe... Read More
How can you dispel an illusion unless you look directly... Read More
You have heard about a particular mutual fund from a... Read More
Sometime around 1980, can't remember exactly, there was a flight... Read More
In one of my previous articles (Investing in the stock... Read More
I often hear from people, "I don't trade. I invest.... Read More
You must take the time once a month to review... Read More
This is an extract of an article which was first... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
Ever have one of those sample boxes of candy? Each... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Any online investor / trader seeks an excellent off or... Read More
One of the great "secrets" of successful people is discipline... Read More
People are always asking me when should I sell my... Read More
Alfred Winslow Jones started hedge funds in 1949. He was... Read More
It seems that every day I turn on the TV... Read More
Regardless of the fact that the world's stock markets have... Read More
Forget making a profit; instead focus on the income provided... Read More
As I said in Part I everyone in the insane... Read More
How many times has this happened to you? You're at... Read More
Every Wall Street analyst, financial planner and broker will tell... Read More
The single most expensive stock market trades are those made... Read More
Stocks & Mutual Fund |