Humpty Dumpty had a great fall and all the King's horsemen could not put Humpty Dumpty back together again.
The Stock Market has had a great fall and all the brokers, CEOs, analysts and politicians have not been able to get it back up again.
Oh, it will go up again, but if history has a way of repeating it will be a long time before we see it at "even". From 1920 to the present there have been 3 major bull markets lasting close to 16 years. Unfortunately, each has been followed by a bear market of about the same length of time. So far we are ending the 3rd year of the projected down cycle with only 13 more years to get to the bottom. It is a long way off.
At a recent investment seminar one of the speakers asked his large audience if they believed the stock market would be higher 5 years from now. Every one except one thought it would be. The current mindset of most investors believes this also. For the period from 1982 to 2000 (18 years, close enough) there has been a bull market. Every investor has considered himself to be a financial genius during that time. There is an old saying, "The market makes fools of us all ? sooner or later".
Unless you learn to listen to what the market is saying and not your broker, you will be able to recoup some of your losses, but probably not all. During this long-term bear called a secular bear market, your main effort will not be to make money but to keep from losing more. During a bear market the one who loses the least is a winner. You may not like what I say, but history has that strange way of doing it over and over.
Maybe I am wrong about it because "this time it is different". I hope so, but you can protect your money in your 401K or elsewhere with a simple loss limit order. Call your broker and have him place a 10% (or whatever number your prefer) stop-loss order on all your positions. That way you don't guess about where to sell; you let the market tell you when it has turned weak.
Brokers and brokerage companies hate stop-loss orders and will try to talk you out of it. Ask him if he will guarantee your portfolio. You can bet he isn't that dumb. It is your money. Once it is gone you will have very little chance of getting it back. Protect what you have left.
Don't be a Humpty Dumpty!
Al Thomas
Author of "If It Doesn't Go Up, Don't Buy It!"
Never lose money in the stock market again.
http://www.mutualfundmagic.com
taxi o'hare Wisconsin Dells ..Before you buy another car you walk around the lot,... Read More
A Guide to Using Stop Loss Orders Stop losses are... Read More
Starbucks earnings are up again and so is their stock... Read More
One of the great "secrets" of successful people is discipline... Read More
I am taking the time to help others learn the... Read More
On November 17 I bought 7 different mutual funds and... Read More
Have you ever thought of investing? Do you have a... Read More
Mutual funds by definition are a mixed bag of stocks,... Read More
When most analysts, financial planners, fund specialists and investors try... Read More
If you are a baby boomer, time is not on... Read More
There are many good penny stock investments available, which could... Read More
Every publicly traded company is required by the SEC(Securities and... Read More
04/28/2005NASDAQ dropped -12.5% year to date in 2005. S&P500 index... Read More
Ever wondered what is a mutual fund? A mutual fund... Read More
Very few people, even professionals, have heard of the Dalbar... Read More
This is an extract of an article which was first... Read More
Have you been listening to the talking heads on CNBC-TV?... Read More
A recent cartoon in my daily newspaper showed two guys... Read More
Have you bought any mutual funds this year or late... Read More
One of the greatest challenges of investing in stocks is... Read More
A few years back ? it seems like an eternity... Read More
I mean it when I say that. While plastic silverware... Read More
You remember the story about the frog that was put... Read More
Ever turn down a street, get half way and suddenly... Read More
You've decided to try your luck at trading stocks or... Read More
bmw rental chicago Ackley ..Very few people, even professionals, have heard of the Dalbar... Read More
Stock trading remains a very competitive field and the stock... Read More
How many times have you said to yourself, "I'd like... Read More
Now that you have some money burning a hole in... Read More
The stock market has not been very kind to your... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
Jack and Jill went up the hill to fetch a... Read More
What does it mean to short a stock?This means that... Read More
Time to look back2004 is over, now we are in... Read More
There is so much involved in developing peak performance, that... Read More
Let me start by saying that...Most online brokers do not... Read More
Caught in a whirlpool and being sucked under. No life... Read More
Have you ever thought of investing? Do you have a... Read More
In November of 2000 when the NASDAQ was trading at... Read More
Outlined below are some of the advantages and disadvantages of... Read More
The bulls and bears of the stock market are both... Read More
The gleam and bright lights of Wall Street lure in... Read More
Someday you may want to retire and continue to live... Read More
Most people think the stock market is a zero sum... Read More
Wouldn't it be nice if you were only in the... Read More
Are you attracted to the idea of being in control... Read More
I often hear from people, "I don't trade. I invest.... Read More
The demand for world oil is increasing while world reserves... Read More
The broker told me not to sell because the mutual... Read More
Even if you don't own any of their stock or... Read More
Stocks & Mutual Fund |