 |
|||
| |||
 |
 |
 |
 |
|
|
| ||||||||||||
| ||||||||||||
|
Why This Bear?
People are constantly asking me why is the stock market going down. What is causing this bear market? It is relatively simple so don't ask an economist. He will give you a 200-page answer that is undecipherable. Can you understand Mr. Greenspan? Let's first realize what it is that makes a stock price go up. The basic reason is that the investor thinks that the company will make a larger profit and pay a good dividend - one that is better than it is now doing. People buy in anticipation of better earnings. Really, it is that simple. Conversely, when a stock starts down investors think the company can no longer sustain its sales and earnings and that the current price is too high so it is sold. Every other reason you hear is hype, smoke and mirrors. Last year we saw more than 1,000 stocks on the Nasdaq exchange lose more than 90% of their value. Many of those stocks have lost even more this year and scores of them are either out of business or been merged into other companies. Their anticipated sales and earnings never showed up. When a large section of the market is adversely affected with shrinking sales that action many times begins to slip over into other sectors. Last year it was the technology group as a whole that suffered the most. This year it will be almost all the New York Stock Exchange stocks. We have just witnessed the biggest point loss in one week in NYSE history. In the long run it is going to go much lower after its rally. The market was already headed down before the World Trade Center tragedy and this single act triggered a great amount of emotional selling. The bear market, which has been with us for about a year, would have gone down to the September 21, 2001 lows anyway even if the New York disaster had not occurred. One thing investors do not like is uncertainty. People want their money to be safe so they will sell some of what they have and will not buy. Those with 401Ks can transfer to money markets. It has become very evident that almost every type of business with a few exceptions will have less sales and shrinking profits. It is not a time to buy. The talking heads on TV are telling you that you can't afford to be out of the market. Oh, yes you can. The best place for the next several months is in a nice safe Money Market fund or some type of short-term bond no-load mutual fund. Until the market uncertainty goes away and profits start improving for a majority of companies it is best to maintain a cash position. That may not be until the middle of next year. In the meantime cash is king. Don't let anyone talk you into buying anything. The bear is still loose. Don't let him gobble up your investments. Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know. Copyright 2005
MORE RESOURCES:
Stocks-Mutual-Funds - Google News |
|
|
|
RELATED ARTICLES
Trading Systems To become a successful trader you must have some kind of method or system to follow that will keep you on track. You may be buying and selling on tips, the weather or phases of the moon (there is a system like that). Intervention Intervention. Now don't let that big word scare you. Risk Control Everything you invest in has risk so you want to do your research before you put your money on the line.For example, when McDonald's opens a new restaurant (please, don't call it a hamburger joint) they will investigate as many of the relevant facts as possible. Duct Tape Did you run out to buy that duct tape yet? Don't forget the plastic sheeting, bottles of water, canned food and a couple of books to read. What are you waiting for? I know - things to get better so you can resume your normal life style. Overvalued & Underbought With all the bad news that has been dumped upon the economy for some reason the stock market is going up. Why?The SEC (Securities and Exchange Commission) has just set up new guidelines for core earnings. Small-Cap Stocks: The Beginning of the Journey When an individual investor wants to roll up his sleeves and do some research in the pursuit of the next big winner in the stock market, the place many start is in the small cap sector.As with the other capitulation sizes (capitalization is a stock's market value), no one can completely agree on a precise definition, but corporations under $2 billion are often considered small caps. Discover the Biggest Trading & Investing Online Mistake Any online investor / trader seeks an excellent off or online future trading career opportunity. Despite this goal, did you know 95 percent of all traders go broke within the first two months? Why do investors lose vast amounts of wealth in one or more of the following markets - option trading, forex trading or currency trading, stock trading, future or commodity trading etc? in such a short amount of time?Most online investors / traders interact in devastating forms of thinking, which convinces the mind to the point where the trader believes that an educational enhancement ability that develops superb market research skills is not important. How to Read an Annual Report Every publicly traded company is required by the SEC(Securities and Exchange Commission) to provide annual reports to it's shareholders, and the general public as well. These annual reports contain very important financial information, as well of summaries of the companies progress made by the CEO, board members, etc. Being Wrong Buying Stock is Okay Being wrong is OK, but let's not carry it to extremes. That applies to everything, but let's limit our discussion here to the stock market. You Wont Like This Why? Because I am going to shatter your conventional wisdom as I have many times in previous columns about the lies that Wall Street continues to tell you. This time we are going to go deeper into the economy to unearth the truth about lies the politicians are telling you. Why Buy and Hold? Since I can remember, and that's a long time ago, the Wall Street brokerage companies, mavens and mutual fund managers have been exhorting the mantra of Buy and Hold for all your investments. There have been erudite studies published that this is the only way to go. How to Pick Winning Stocks There is nothing more exciting than finding an undervalued stock and seeing it explode out of nowhere rising in value 100% or more in a few weeks. Some stocks can move as much as 1000% in a year and?. Investment Attorneys and Garbage Stocks How is it possible that trash Companies are posting less than expected results? Trash Companies are thought of by prudish investors as some of the safest stocks to own. Ask Warren in his Buffet of Essays on Corporate America. Successful Trading - Taking Profits - Part 1 So you're started trading, you bought some positions with your online broker, you've set some reasonable stop-losses to protect your account and all of a sudden one of your positions move strongly in your favor - so what do you do now? This my friend, is probably the hardest situation to deal with in trading the market - believe it or not.Do you take profits? Do you hold on for more profits? Do you take partial profits? There is no textbook answer to these questions as it depends on your trading objective. Why the Majority Fail at Stock Investing The gleam and bright lights of Wall Street lure in many new investors each year, only to send them home crying to their friends and family. Why do so many people fail when it comes to the stock market? The reason is very simple: Hard work! Most people are looking for a quick buck or a fast path to riches. Kick The Tires Before you buy another car you walk around the lot, kick the tires, slam the doors and look at the mileage indicator. That's an odometer. Choosing A Fund For years I have been saying you must have a fund that is outperforming the S&P500 Index. Well, I've changed my mind. 9 Deadly Trading Mistakes! The following are a list of nine things you want to avoid at all costs. Anyone of them can literally destroy your financial dreams and goals!1. Mutual Funds are Dead You may have wondered why your mutual funds have been going down for the past 2 years. The answer is very simple, but not one you will hear from Wall Street as they want you to send money. No Load Mutual Funds or Exchange Traded Funds (ETFs)? If you are fed up with early redemption charges and ever increasing mutual fund management fees on top of bad-performing fund managers, read on. There is a quiet revolution going on in the no-load mutual fund industry and you, the individual investor, may benefit from it greatly.
|
| home | site map |
| © 2006 |