vinyl siding installation island lake concrete siding bloomingdale siding companies round lake park siding options niles siding installation gurnee .. Chicago Drug testing

What To Buy?

Now that you have some money burning a hole in your pocket and the stock market is going up you have decided to buy some stock or maybe a mutual fund, but you have the momentous decisions to what to buy.

At this point you have three decisions to make besides which equity to buy:

1. How much to buy.
2. When to buy.
3. When to sell.

Which of these is the most important decision? Let me tell you this as a professional trader. What to buy and when to buy are the two least important of these decisions. Maybe only 10%. I know that comes as a shock to you because everyone is trying to find that one perfect stock that will make him a millionaire almost immediately. It's not going to happen.

Trading is an occupation. Just like the business or profession you are in now it takes time to learn. There are certain basic rules that apply to every occupation. Most brokers and financial planners don't know them, but as a former floor trader I had to learn them or I could not have survived.

What to buy is the least important because there are always several good buying opportunities every day. When to buy is not anywhere as important and when to sell. Every professional trader I know will first determine the risk, his potential loss, before buying. At the same time he makes his buy he puts in a sell order called a stop-loss order to automatically exit the position should it go against him. He is not thinking about how much he will make on a trade. He is thinking about protecting his capital should he be wrong. Professional traders are right less than 50% of the time, but they never take big losses.

The loser's philosophy is always thinking about how much he will make and he refuses to face up to the very possible fact that he could lose money, a lot of money if he does not have a loss limit of some kind on his position. The loser is willing to be wiped out rather than admit he is wrong. Brokers tell you you have not lost money until you sell. Believe that and I will sell you my flying pig.

The other very important concern for your investments is how much of this stock should I buy. A good rule of thumb is between 10% and not more than 20% of your portfolio. Most mutual fund managers limit a risk position to about 5%, but they have other considerations. Never put all your money in one trade because it looks so good. That is super dumb.

Before you decide what to buy be sure you have in mind the amount you are willing to risk and the size of the position you wish to take (number of shares or dollars). When you have learned this you will be a successful stock market investor.

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.

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

In The News:

Investment Attorneys and Garbage Stocks

How is it possible that trash Companies are posting less... Read More

The Exclusive Club of Large Caps

Picture one of those clubs where only the real heavyweights... Read More

Low Expense Ratio

One of the big advertising kicks today from mutual funds... Read More

Market Timing?

The recent criminal fiasco in the mutual fund industry is... Read More

War Market

There is no question that the stock market is being... Read More

Take The Time

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

How To Pick A Mutual Fund

Mutual funds by definition are a mixed bag of stocks,... Read More

The Secret Art of Backtesting

If you have not back tested your trading system, you... Read More

Stock Market Insanity

Let's first define insanity. It is doing the same thing... Read More

An Old Proverb for Investing

"If you don't know where you are going, any road... Read More

Buy and Hold: How to Perpetuate Your Investment Losses

A recent cartoon in my daily newspaper showed two guys... Read More

Again With the Bubbles?

A few years back ? it seems like an eternity... Read More

How to Evaluate Load vs. No Load Mutual Funds

If you have been dealing with mutual funds for any... Read More

Small-Cap Stocks: The Beginning of the Journey

When an individual investor wants to roll up his sleeves... Read More

Series 7 Exam

What is the Series 7 Exam? If you... Read More

How We Eluded The Bear Of 2000

The date October 13, 2000 will forever be embedded in... Read More

The Club

Yesterday I received my monthly issue of MONEY magazine. This... Read More

Parachute Investing

Ever jumped out of an airplane? It's OK if you... Read More

Why Change Funds?

On November 17 I bought 7 different mutual funds and... Read More

Market Experience of a Na?ve Stock Operator

Sometime in the third quarter of 1997, someone told me... Read More

Frog In The Pot

You remember the story about the frog that was put... Read More

More Window Dressing

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

Stock Analysis

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

Stock Chart Reading

As an investor you will want to check out any... Read More

Dont Lose All Your Money

That sounds like good advice doesn't it? Don't lose all... Read More

led street light manufacturer led flood light bulb Pete's produce ..
led street light manufacturer led flood light bulb Pete's produce ..