You have decided to buy some stock or mutual funds, but wonder which one to buy. You need more information so you call your broker for advice. A so-called "full service" broker will bury you with all kinds of reports, analysis sheets and other pretty pieces of paper, but will probably try to sell you something that makes him the most commission.
Let's see. What does Wall Street think you should know? Of course, you will want a company that is currently favorable or "hot" ? like WorldCom used to be. Then you need to look at their financial statement that has been audited by a big accounting firm. ? like Arthur Andersen. You really should check to see if they have any big outstanding financial obligations that have little asterisks next to them in the Annual Report ? like under funded pension plans.
Of course you will want to get their financial statement to check their P/E ratio. That's Price/ Earnings or how many years of earnings it will take to make back the price of the stock today. The lower that number the better. For many years the average has been about 14. If it is above 20 or 30, well ??? We won't factor in the rate of inflation that will dilute the buying power year after year. And there are lots of other numbers like this Wall Street says you should be studying.
Maybe it is easier to buy a mutual fund. You can go to Morningstar for every bit of information about a fund you can think of. They will show the breakdown of the funds' portfolio, but that can easily be 6 months old. They do have those star ratings. From one to 5 stars, but I can't recall seeing any one star funds and hardly any 2 stars. Why? Well, I think they don't want to offend the fund manager even though he is not making money for his clients.
In fact, they love to give 5 stars to funds that have had losing years one after another. Unfortunately some of their information is out of date. They do list all the stocks the fund owns, but the fund may have sold them so you can't tell for certain what they are investing in.
Brokers want to send you reports, graphs, company updates, interim reports and I don't know what all, but stop and ask yourself, "If I can get this so can everybody else so what good is it?" Now you've got it. None. All that information will not tell you that after you buy it it will go up ? and that's all you want to know.
Basically there are two things you want to know. 1. Is it going up? 2. If it goes down where do I sell it to protect my capital? That's all the information you need.
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
If you are serious about making and keeping money by... Read More
In a previously written article, we expanded the use of... Read More
You probably have been told that options are risky. Even... Read More
What a great statement!I just heard someone use it in... Read More
From the book 'The Stockopoly Plan' by the author Charles... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
For the last few weeks we have seen the stock... Read More
We keep hearing about this bear market and that the... Read More
Investors who exclusively use broadly diversified, no load mutual funds... Read More
I have watched my cat play with a bag of... Read More
Forget making a profit; instead focus on the income provided... Read More
Reduce your investing and stock market risks by:Setting your sights... Read More
The single most expensive stock market trades are those made... Read More
Carefully thinking through your goal as a trader is of... Read More
Where is the beef? Or maybe it should be where... Read More
For the last 12 years we have seen the Japanese... Read More
Hedge current portfolio positions and gain access to capital resources... Read More
I often play a little game with myself when I... Read More
The gleam and bright lights of Wall Street lure in... Read More
Why? Because I am going to shatter your conventional wisdom... Read More
Options trading can increase the profits you make when trading... Read More
For years I have been saying you must have a... Read More
The Surgeon General of the United States says that smoking... Read More
In 1960 an engineer working for a watch company in... Read More
If you don't know what a Roth IRA is then... Read More
I cringe every time I hear a novice investor tell... Read More
Humpty Dumpty had a great fall and all the King's... Read More
On the 40 year journey through the turmoil of a... Read More
Money management starts with protecting your capital, realizing profits and... Read More
There are many important things you need to know to... Read More
IT'S REMINISCENT OF THE OLD children's tale about an old... Read More
You have heard about a particular mutual fund from a... Read More
It is wonderful to be alive in the information age.... Read More
If you are going to be a winner in the... Read More
Let's say you are interested in this one company. You... Read More
One of the greatest challenges of investing in stocks is... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
We are already in it, but you can't see it.... Read More
Wall Street has been preaching for years and years to... Read More
Every year I go to the Money Show in Orlando,... Read More
Jack and Jill went up the hill to fetch a... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
If you're like many investors who squander those small dividend... Read More
If you want one.And I don't recommend any broker with... Read More
Before you embark upon a journey of trading stocks or... Read More
I go to the Money Show every year to visit... Read More
Everybody is riding the Wall Street Roller coaster. Even if... Read More
One of the most believed bits of conventional wisdom from... Read More
The stock market has been going up for more than... Read More
As GuruFocus updates the stock buys and sells of gurus,... Read More
Stocks & Mutual Fund |