I am sure that if you have a brokerage account with a "full service" broker you have been getting calls about what to buy and sell. If you have big losses in certain stocks you might be hit with that great Wall Street lie to buy more so you can 'Dollar Cost Average'. It doesn't work.
In a recent study going back for 5 years a dollar cost averaging program was set up buying the S&P500 Index mutual fund. At the end of 62 months the investor had put in $31,000 and it was now worth $31,162. You would have done better in a savings account at your bank. And that assumes there was no commission or fees of any kind.
Let's say you owned a stock such as Cisco. This one is held by hundreds of thousands of investors and almost every one of them has a loss. It traded as high as $82 and for more than a year was in a range over $50/share. It was the darling of very broker from here to Timbuktu and when it started down they kept yelling buy more, buy more. Another one in this same category is Lucent going from about $80 to $5. Yuk!
Now Wall Street is trying to get you to buy more of these losers so you can "get out even" when it goes back up. And pigs can fly. Think about this. The person that currently owns these stocks or any similar ones with big losses is now waiting for them to go back up so they can "get out even". Ho boy. It should be extremely obvious that every time one of the monsters sticks its head up it is going to be hit with tremendous selling. There isn't a chance that any of them will ever get back to their old high prices ? or even close.
What does an investor do? Clean out your garage and have a yard sale. Get rid of this junk and put your money to work where there is a chance to make a profit. And don't buy any stock that has lost 50% to 80% during the bear market of the last 2 years. Brokers will tell you these are now "cheap" and are a good buy. Not a chance. There are too many people waiting to sell.
Now is the time to try to find a completely different equity that did not get hammered last year. Look for one that has a nice smooth upward pattern. Buy it and this time know how much loss you will be willing take if it goes down. How do you do that? Very simple. Use a trailing loss limit order called an open stop-loss order about 10% under the lowest price of the previous month - and keep moving it up as the price advances. That way you will not give back profits.
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
Ford Excursion rentals Bolingbrook ..When you stand on the ocean shore and watch the... Read More
"Buy and hold" is one of the most heralded investment... Read More
That sounds like good advice doesn't it? Don't lose all... Read More
The gleam and bright lights of Wall Street lure in... Read More
As one of my regular readers you know I have... Read More
Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More
Did you know you can make money (and a lot... Read More
Being wrong is OK, but let's not carry it to... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
The fight continues to rage among traders who use technical... Read More
The stock market has been going up for more than... Read More
When most analysts, financial planners, fund specialists and investors try... Read More
Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More
You probably have been told that options are risky. Even... Read More
Ever done any whitewater rafting or canoeing? Long periods of... Read More
What is leverage?Here is a definition of leverage from an... Read More
Profitable day traders recognize that momentum trading is among the... Read More
I have a 2-car garage. There are nice shelves on... Read More
The trading method you employ to approach the stock market... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
The World Bank claims that some two billion of the... Read More
Any online investor / trader seeks an excellent off or... Read More
Robert Rodriguez likes to buy stocks at their lows. When... Read More
For years investors have been taught to look into the... Read More
Every day I hear someone on CNBC proclaim that "this... Read More
Bluffs Ford Excursion rentals ..There is a famous cliff on the ocean in Acapulco... Read More
Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More
Carefully thinking through your goal as a trader is of... Read More
As an investor you will want to check out any... Read More
Every broker and financial planner will tell you that you... Read More
The demand for world oil is increasing while world reserves... Read More
When you become interested in a stock or mutual fund... Read More
If you are a baby boomer, time is not on... Read More
One of the main reasons many of us get into... Read More
The Dow Theorycharles h. dowcharles h.... Read More
Wall Street's watchword has always been diversification, but what does... Read More
Picture one of those clubs where only the real heavyweights... Read More
You read and hear a lot about hedge funds. Unfortunately,... Read More
I love roller coasters. The steeper the better. High and... Read More
We need a rabbit!This was a pretty horrible week for... Read More
I use the P/E ratio as a secondary indicator for... Read More
Mutual funds were moderately successful in creating a presence in... Read More
I made my very first investment in the stock market... Read More
Recently I was invited to appear on a live CNNfn... Read More
There can't be many traders who haven't at least considered... Read More
A Guide to Using Stop Loss Orders Stop losses are... Read More
Refuse is a serious issue in any society, about as... Read More
Investing in long-term financial vehicles give you the most gains... Read More
Because you don't feel too sure about which stock or... Read More
I constantly hear the talking heads on CNBC-TV, the radio... Read More
Stocks & Mutual Fund |