siding companies soffit installation grayslake cement board siding vinyl siding installation siding calculator skokie .. Chicago Drug testing

Stock Market Insanity

Let's first define insanity. It is doing the same thing over and over and expecting a different result. And that is what most investors do and they can't understand why they are not able to make money in the stock market.

Do these investors need a psychiatrist, a psychologist, a talk with their minister or none of the above? I know, you think they should talk to their broker or their financial planner. Believe me, folks, these two are part of the problem and not the solution.

If they knew the answers everyone would be rich. Let's go back and look at who taught these mavens how to invest. The Wall Street brokerage houses taught them or rather did not teach them the most basic rules of the game. Why? Because brokerage houses want you to buy (for commission) and they do not want you to sell even though that means another commission. There are two basic reasons they don't want you to sell and it has nothing to do with that one selling commission.

If you sell you might take your money out of your account and that is one of the things the Maul Street crowd never wants to happen, but the most important is they make money when your account is invested. It is not a lot, but it in a nice steady 1% or more. You are their unspoken collateral in the worldwide money shuffle.

Any broker who suggests a customer sell is usually chastised in some way or just plain fired. A broker who allows large sums of cash to accumulate in customers accounts is told to invest (?) it or hit the road. The house (that's the brokerage firm) does not want to see customers with big cash balances although there are times when that is exactly where they should be. Remember 2000 to 2003? During that three year period wouldn't it have been better for your account to have had no stock or fund positions?

Brokers or financial planners are not taught simple methods to protect customer funds. And I mean simple. Too many folks during the 2000 debacle lost 40% of their money and more. There was absolutely no reason for this if basic money management techniques were instituted.

Customers could be made aware that they should not give back more than 10%, maybe as much as 15%, of their portfolio value when the stock market goes in the tank. That occurs on a regular basis. Declines in equities of 20% to 40% happen regularly and no customer should be mesmerized into holding during those periods.

During the 2000-2001 period there were less than 3% recommendations by brokers to sell and those sells were after the stock had crashed about 80% to 90%. It is too late then. Your money is gone. If brokers and financial planners had been taught to advise people to place 10% stop loss orders their retirement accounts they would be much fatter today.

Stop doing the same thing over and over again because of bad advice. Learn to sell when your position goes negative. Don't be one of the insane.

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

al@mutualfundstrategy.com; 1-888-345-7870

In The News:

The Right Mutual Funds For Baby Boomers

If you are a baby boomer, time is not on... Read More

Keep Your Profits

It looks like we have now entered a new bull... Read More

What is a Mutual Fund?

Ever wondered what is a mutual fund? A mutual fund... Read More

Complacency Indicator

If you haven't heard of the technical indicator with the... Read More

Stock Analysis

I receive emails from Morningstar. This company provides statistics and... Read More

KISS Formula

There are formulas for just about everything, but it has... Read More

Is the Stock Market for You?

Many people would like to diversify their portfolios to expand... Read More

Market Timing

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

Hedge Fund Advertising

Have you seen all those big full page ads for... Read More

8 Penny Stocks to Avoid

There are many good penny stock investments available, which could... Read More

Political Investing

We have two candidates for president that have really different... Read More

The Great Stock Market Secret

When the stock market is going up and all your... Read More

Whitewater Stock Market

Ever done any whitewater rafting or canoeing? Long periods of... Read More

A Penny for Your Stocks

According to Investopedia Inc. the penny stock market has seen... Read More

Mutual Fund Ball and Chain

The broker told me not to sell because the mutual... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

Stock Market Diversification

In one of my previous articles (Investing in the stock... Read More

How to Pay Less and Get More: Discount Broker vs Professional

How do you invest? What do you really pay? At... Read More

Take The Time

You must take the time once a month to review... Read More

Is Active Trading The Answer?

One of the main reasons many of us get into... Read More

Pathways

During our travel down life's path we come to many... Read More

Mutual Funds are Dead

You may have wondered why your mutual funds have been... Read More

Market Success

Who are the successful investors?There are those who follow the... Read More

Dont Spend Another Dollar on Business Opportunities Until You Read This

With an insecure job market, overworked employees, insufficient retirement savings... Read More

Shadow Bull

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

led parking top led manufacturers Pete's produce ..
led parking top led manufacturers Pete's produce ..