 |
|||
| |||
 |
 |
 |
 |
|
|
| ||||||||||||
| ||||||||||||
|
Inertia Syndrome
When it comes to buying a stock or mutual fund most people act pretty quickly. There are some who will take the time to get a report from Morningstar (it is worthless) or get reports from their broker (also worthless) or even do a search on the Internet (if you know what you are doing). When your broker says "buy" you buy and when a friend gives you a "tip" you buy. Any fool can buy. It is the wise man who knows how to sell. One of the old masters of the market Bernard Baruch used to say, "I sell too soon", but he died a multimillionaire. There is a reason folks are slow to sell. They fall in love with their position and know all the reasons why they should hold on. "My broker said it will come back". And pigs can fly. With all these symptoms that have turned into syndrome diseases like acid reflux for which there is one of those purple pills to cure you in a hurry. When you buy a stock or mutual fund that doesn't go up or, worse yet, goes down we need one of those purple pills. People have contracted Inertia Syndrome. The symptoms are terrible. Each day as you look on the financial page of your paper and see your stock has gone down another point your stomach begins to act up and you need one of those pills. You keep putting off going to the doctor (broker) to tell him to sell so your symptoms will go away, but you don't. Things continue to get worse and worse until your money is almost all gone. Then you decide to sell. By then it is too late. What should you have done? When it comes to your health you can change your diet and stop eating all those lovely sweet gooies that have no nutrition. When you own a stock like that and you lose sleep the best thing to do is to get rid of it. Maybe you have a profit and you are seeing it disappear. There is a way to relieve yourself. Most people don't know when to sell so the best thing to do is have the market tell you. It is very easy. The first rule for making money in the market is to cut your losses short. As soon as you buy any stock or fund you must decide how much you are willing to risk. Five percent? Ten percent. Fifteen percent? That number should be calculated from the closing high of the move or never lower than where you bought it. If you paid $50 per share your risk should be no more than $5.00 per share. To overcome Inertia Syndrome put the medicine in play as soon as you buy your position by using an Open Stop Loss Order. By limiting your risk you will never have a really bad belly ache. 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
Bottoms Ups If you have talked to a stock broker or financial planner in the last few days I will bet they all agree that there are some great bargains out there and now is the time to start buying in anticipation that the market will go back up. You will also find agreement from the talking heads on CNBC and those talk radio station stock mavens. 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. Selling Strategies - Setting a Stop Loss Sometimes the best way of lowering exposure to risk is not to invest at all! However, when we make the decision to jump into the muddy waters of the stock market, its always a good idea to have a life jacket ready, just in case.We all have stories of that "must have" "can't lose" stock that looking back, we didn't really need to buy, and it definitely lost. Starbucks Stock is Up Starbucks earnings are up again and so is their stock slightly. It appears they are exporting America's weakness to caffeine and sugar around the world. Dont Buy Stocks based on P/E Ratio alone I use the P/E ratio as a secondary indicator for buying and selling stocks but I don't use the ratio in the same a manner as many value investors teach. I will explain the difference in my methodology for using the P/E ratio to your advantage. Series 7 Exam What is the Series 7 Exam?If you are looking to become a licensed Stockbroker, you need to know about the Series 7.The Series 7 is a 250 question exam that when passed, licenses you to act as a Registered Representative. Choosing An Investment Stock Broker If you want one.And I don't recommend any broker with whom to trade who will be giving you advice on what to buy and sell. Prospering with Mutual Funds: How Anyone can "Afford" an Investment Advisor Recently I was invited to appear on a live CNNfn television show to discuss my article "How to evaluate Load vs. No Load Mutual Funds. So, What is This Stock Market Thing Anyway? We've all heard of the stock market and probably have a general idea of what it is and how it works either from high school economics classes, television financial reports, and the countless film depictions of what happens on the floor of the New York Stock Exchange. But how does it really work and what is meant by "playing the stock market?"The Stock Market in a NutshellCompanies sell shares of stock as a means of raising capital. Commoditizing the world Let's discuss commodities; with the latest Enron situation, it is important to understand the way things work. A commodity is anything useful, especially a transportable agricultural product or mining product. Discover the Retirement Breakthrough the Federal Government Created for You - The Roth IRA! If you don't know what a Roth IRA is then stop everything, print this article and read it carefully as this will certainly be the most valuable information you read this year. This next retirement account is to your net worth what light bulb was to electricity. Oil Stocks CHK WLL - What Is Their Worth? (1) CHK stock price $16.74, NAV $32. Trading Tips No 6: The High Cost of Low Cost Stock Market Information It has been said that low cost or even free stock market information or trading advice can be the most expensive advice you can get. The meaning is clear. Smart Day Trading Strategies to Help You Make Money in the Stock Market Stock trading can be a very profitable activity. You can make big amounts of cash in a short period of time. Long-Term Investment In Todays Market? The stock market is very unstable at this time going up and down while interest rates are so low you want to be a borrower and not a lender. Would you like some suggestions on how can you get the most out of low interest rates while being assured your principal will not disappear while you are trying to make some money? Of course, there is always the danger of borrowing the money and then spending it just because it is there. Direction It is difficult to make money in a bull market, but what do you do when you are in a bear market? In what direction should you go not only to make money but to protect what you have from loss?Almost immediately investors think what should I buy that will help me reach my financial goals? This answer may not be the one you will like. It is really not important what you buy as long as you know the rules of the game - the stock market game. Wall Street Paradigm 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. What is a Mutual Fund? Ever wondered what is a mutual fund? A mutual fund is a pool of money run by a professional or group of professionals called the "investment adviser."A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. 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. 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.
|
| home | site map |
| © 2006 |