In 1960 an engineer working for a watch company in Switzerland discovered that a small crystal would vibrate at a constant rate. He found this was so accurate that it could be used to calibrate time so he took it to company management and said it would make an entirely new kind of watch that had no springs and no gears. They could not imagine who would want such a thing. Swiss watches dominated world commerce. "Why change?", they said. The bosses did not even bother to patent it.
The inventor took his new idea to a commercial trade show, set up his booth and tried to interest manufacturers to produce his new kind of watch. Of the thousand people only 2 were willing to try it ? Texas Instruments and Seiko Corp. of Japan. Ten years later the Swiss manufacture of watches had shrunk to 10% of it former production.
It took a complete change of thinking to produce this new model. Most people are rooted in the old way they have always done it and are reluctant to change. The new model, the new paradigm is refused.
Now I want you to think about another paradigm. This time a model for your investment portfolio.
Wall Street has been teaching since time began to Buy and Hold. When your stock or mutual fund heads south you are not to worry about it because "the market always comes back". But my question is, "In your lifetime?" There are thousands of stocks that go up than go down and never recover. You might have some of those in your bank vault.
Here is the change in thinking you need to incorporate. Place a stop-loss order about 10% or 15% below the price. This is especially true when you first buy. The most important thing every professional investor does is protect his capital. You never need worry about how much you will make. Your major concern is how much can I lose if this turns in a mangy dog. After you have owned this gem and it does go up then you can replace the stop-loss order to a higher level and continue to do that until you are finally stopped out (sold out) with a nice profit when it starts down.
Your broker will not want to do this for one very simple reason. He then becomes responsible to see that the order is executed because if it isn't he will have to make up the difference out of his pocket. He will actually have to watch your account. If he gives you a hard time then find another broker.
Customers like you are not taught this simple method of thinking about the stock market. It requires a change of thinking. There is a better way than how the big brokerage houses tell you. This paradigm will allow you to make more money because when you are sold out and have cash in your account you will be able to find a better stock or mutual fund.
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
http://www.mutualfundmagic.com; 1-888-345-7870
express cleaning service Arlington Heights ..When you stand on the ocean shore and watch the... Read More
I go to the Money Show every year to visit... Read More
There are many good penny stock investments available, which could... Read More
Ever wondered what is a mutual fund? A mutual fund... Read More
As I have said many times before in this column... Read More
Let's discuss commodities; with the latest Enron situation, it is... Read More
If you have been watching the stock market at all... Read More
There is a famous cliff on the ocean in Acapulco... Read More
IT'S REMINISCENT OF THE OLD children's tale about an old... Read More
The date October 13, 2000 will forever be embedded in... Read More
Options trading can increase the profits you make when trading... Read More
You've decided to try your luck at trading stocks or... Read More
The greatest stock market myth is the idea that investing... Read More
So you're started trading, you bought some positions with your... Read More
When it comes to stock market trading it PAYS to... Read More
Congress recently passed another new law that is supposed to... Read More
Investors who exclusively use broadly diversified, no load mutual funds... Read More
Day trading is all about making buy and sell decisions.... Read More
Have you bought any mutual funds this year or late... Read More
What the heck am I talking about?It is often said... Read More
Refuse is a serious issue in any society, about as... Read More
On the 40 year journey through the turmoil of a... Read More
Just about now everyone is confused as to which way... Read More
I would like to share with the reader an article... Read More
Carefully thinking through your goal as a trader is of... Read More
tidy up service Arlington Heights ..Because you don't feel too sure about which stock or... Read More
I am sure that if you have a brokerage account... Read More
Right now there doesn't seem to be any "gold fever".... Read More
The Winter Games for the Olympics are coming up soon... Read More
Stock trading can be a very profitable activity. You can... Read More
If you are fed up with early redemption charges and... Read More
One of the basic laws of physics states that a... Read More
∙ Make every investment in the stock market a long-term... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
Most stock market traders have a favorite technical indicator.The one... Read More
Sometime in the third quarter of 1997, someone told me... Read More
As a novice trader, you'll often feel the need to... Read More
The greatest stock market myth is the idea that investing... Read More
The bulls and bears of the stock market are both... Read More
When you invest in the stock market for ever-increasing cash... Read More
Two weeks ago I wrote about what the Securities and... Read More
With the internet such a huge part of our daily... Read More
As I have said many times before in this column... Read More
Are you one of those many people who dread reading... Read More
A colleague of mine just returned from a scuba diving... Read More
We all know the expression, "My country, right or wrong",... Read More
Now that you have some money burning a hole in... Read More
When it comes to stock market trading it PAYS to... Read More
Intervention. Now don't let that big word scare you. The... Read More
People are constantly asking me why is the stock market... Read More
Stocks & Mutual Fund |