adding screen porch to ranch house round lake park 2 car garage with master bedroom addition brick house with vinyl siding addition lane homes and remodeling adding a front porch to a bungalow inverness .. Chicago Drug testing

Selection Vs Direction

As I have said many times before in this column it really doesn't make any difference what you buy ? stocks, funds or indexes - it takes smarts to know when to sell. Direction of the general market is more important than selection of any equity.

Everyone from the multimillion dollar analyst on Wall Street to your broker to your barber thought he was a financial genius from 1982 to 2000. Anyone using the stock page from the Wall Street Journal as a target could have picked a winner even if his aim was terrible. Just hit the page anywhere and buy that stock. We were in a secular bull market. History shows these last about 16 to 18 years and , unfortunately, are followed by a secular bear market of about the same period of time.

During the up time the case for "the market always goes up" becomes crystallized in their brain so that any set back is viewed as a "correction" that will be soon be overcome and the market will be making new high prices again. Unless you are willing to limit the amount of loss from those high prices you will give back all your profits and many times even more.

The price of a stock will fluctuate for many reasons usually involving how much profit they are making or anticipate making in the near future. During the past 5 years we have seen tremendous ups and downs in many of the major issues. When a "good" company's stock goes down it doesn't mean it is a "bad" company, but it does mean you will be losing money if you hang on to it. The reason you bought the stock was to make money, not lose it, so you must be willing to sell when it goes against you.

Knowing the general direction of the overall market is the key to selling success. An excellent indicator is the S&P500 Index. In the last 5 years it has gone from 920 up to 1550, down to 800 and the recent price is 975. What a ride! I have written in previous articles how to determine market direction so you will be in cash with your profits in the bank while the market is going down.

Let's compare what some of the "good" stocks have done during that same 5-year period. AT&T from 40 to 100 to 20; Merck from 60 to 95 to 40, now 60; General Electric from 25 to 60 to 22 and, 30; Coca Cola from 88 down to 38, now 45. And there are thousands more that fit this category of losing 50% or more.

These are all "good" companies, but you can lose your shirt, pants and underwear if you stick with the Buy and Hold philosophy. By placing a trailing stop loss order of 7 to 12% as your stock advances the stock itself will tell you when to sell. Whatever stock or fund you select remember to exit when the direction changes.

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

In The News:

Smart Day Trading Strategies to Help You Make Money in the Stock Market

Stock trading can be a very profitable activity. You can... Read More

Two for the Money

Look back over the years and try to remember how... Read More

Prosperity

It has fallen upon the consumer to make our economy... Read More

More Window Dressing

Two weeks ago I wrote about what the Securities and... Read More

Mutual Funds: The Modern Den of Thieves!

Mutual funds were created with the idea that one person... Read More

How Much Information Do You Need?

You have decided to buy some stock or mutual funds,... Read More

Making Outsized Returns in the Stock Market - Using the Dow Theory

The Dow TheoryCharles H. Dow... Read More

Inverted Interest Rates

Inverted interest rates? What's that? Who cares? Even if you... Read More

Market Timing

Every broker and financial planner will tell you that you... Read More

Stock Market System ... ONLINE STOCK TRADING ... Beyond Day Trading Basics & Tips

Day trading is all about making buy and sell decisions.... Read More

Leverage - Margin Debt

What is leverage?Here is a definition of leverage from an... Read More

Moving Averages

Every day on CNBC-TV they show a 200-day moving average... Read More

Analyzing Growth Stocks: An Important Focus For Any Investor

Analyzing growth stocks is an important focus for any investor.... Read More

Seecrets on Investment: Tired of Making Huge Losses in the Stock Market ? Part 2

Fundamental analysis.Fundamentals analysis says the best way to predict the... Read More

Evaluation II

As I said in Part I everyone in the insane... Read More

China Syndrome

There has been great condemnation recently because China has been... Read More

Mindset

In 1960 an engineer working for a watch company in... Read More

Planning Your Dive and Diving Your Plan ? Trading!

A colleague of mine just returned from a scuba diving... Read More

A Good Fund Manager

Every Wall Street analyst, financial planner and broker will tell... Read More

Dont Buy Stocks based on P/E Ratio alone

I use the P/E ratio as a secondary indicator for... Read More

Stock Trading Diversification

This is the continuing story of our two imaginary traders,... Read More

My Neighbor Got A New Car

I don't know what kind it is, but I saw... Read More

Acapulco - The Stock Market Dives

There is a famous cliff on the ocean in Acapulco... Read More

The 401(K): How The Insider Has Stolen Your Retirement!

Mutual funds were moderately successful in creating a presence in... Read More

Shadow Bull

As one of my regular readers you know I have... Read More

industrial led light commercial led lighting fixtures Pete's produce ..
industrial led light commercial led lighting fixtures Pete's produce ..