Are you one of those many people who dread reading their 401K statements? You have been watching it decline for about 2 years and are wondering if will ever stop. Just about everyone says the market will come back. Brokers say you are in for the long haul so don't worry. Any account that drops to a 50% loss has to go up 100% to get "even" and that is a very difficult phenomenon. If you have an 80% loss as has already occurred in the Nasdaq you would need a 400% rally to get "even". At 90% you have to see a 900% rise to that mythical "even".
Buy and Hold has been preached so long and so loudly that everyone believes it. As Adolph Hitler said when you tell a lie tell a big one. Wall Street has been screaming this one down the throats of investors for so long it has become conventional wisdom. Look at your 401K today and compare it to 2 years ago and tell me you believe in Buy and Hold. Common sense will not allow it.
Every broker has been taught that market timing doesn't work. Yes, they teach them that and they have been good students. The problem is they have had a bad teacher. Within the funds you now own the fund managers buy and SELL many times during the year because there is a time to sell. Selling is the key to successful stock market investing.
A friend mine came to me with his wife's 401K from United Airlines. It is composed of 8 Fidelity mutual funds. The employee can pick any one or more. Since the first of the year six of the eight are down from 3% to 27% (average 10.77%) and the other two were up an average of 3%. The two that are up are fixed income funds otherwise known as bond funds. If you have a 401K, IRA or SEP or almost any mutual funds the only place to preserve your capital during this secular bear market is in a bond fund - a no-load bond fund. Do NOT pay commission for these. And there are many of them.
For years Wall Street has condemned those of us who use market timing. Well, you can call me what you want, but I will have my money when the Buy and Holders are broke.
Stock mutual funds do not work in a long-term bear market. Mutual funds, as we have known them for the past 20 years, are dead. You now have only two choices within your retirement account for your money - a bond fund or a plain money market account. Don't cry that you will only make 5% on your money. Think about the 20% to 40% you will not lose. According to Lipper 99% of U.S. equity funds lost money in the second quarter. I have been telling investors for years - cash is a position.
Enronitis broke thousands of people because they would not (could not) sell as the stock broke down. Don't let 401K-itis break you.
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
Lincoln Stretch rentals Alsip ..When is a dividend not a dividend?The latest thing "conservative"... Read More
When purchasing mutual funds we are cautioned to read the... Read More
Yesterday I received my monthly issue of MONEY magazine. This... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
I know there are a lot of you out there... Read More
Maximizing a stock market investmentThere are several factors an investor... Read More
I have been trading for several decades and was an... Read More
This is a rather simple strategy with which I am... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
To become a successful trader you must have some kind... Read More
As I have said many times before in this column... Read More
The stock market is very unstable at this time going... Read More
Index Fund Trading can be one of the most profitable...or... Read More
Just about now everyone is confused as to which way... Read More
Three little pigs went to the market to stock up... Read More
Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More
Day trading is all about making buy and sell decisions.... Read More
On Monday, November 25, 2000 Investor's Business Daily listed on... Read More
I love roller coasters. The steeper the better. High and... Read More
1. Do not spread your money too thin.My friend has... Read More
A few years back ? it seems like an eternity... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
At some time in your life you have been on... Read More
The single most expensive stock market trades are those made... Read More
Let's assume that you want to make some serious money... Read More
Western Springs shuttle limo ..Stock investment advice is easy to find. Do you get... Read More
Every successful trader has a winning system. There are of... Read More
IT'S REMINISCENT OF THE OLD children's tale about an old... Read More
The trading method you employ to approach the stock market... Read More
(1) Stock Market is Tough Place to Make Any Money... Read More
The fight continues to rage among traders who use technical... Read More
Mutual funds were moderately successful in creating a presence in... Read More
How many people went to a cash position this week?... Read More
If you have been dealing with mutual funds for any... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
Two weeks ago I wrote about what the Securities and... Read More
Any online investor / trader seeks an excellent off or... Read More
Ever have one of those sample boxes of candy? Each... Read More
Someday you may want to retire and continue to live... Read More
You read and hear a lot about hedge funds. Unfortunately,... Read More
In a previously written article, we expanded the use of... Read More
It is finally catching up with them. The brokerage companies... Read More
Analyzing growth stocks is an important focus for any investor.... Read More
You have heard about a particular mutual fund from a... Read More
Stock trading remains a very competitive field and the stock... Read More
Since I can remember, and that's a long time ago,... Read More
As an investor you will want to check out any... Read More
Ever done any whitewater rafting or canoeing? Long periods of... Read More
Let's go into the details of why non-indexed mutual funds... Read More
Success in small cap & micro cap stock trading like... Read More
Stocks & Mutual Fund |