 |
|||
| |||
 |
 |
 |
 |
|
|
| ||||||||||||
| ||||||||||||
|
Forecasting the Stock Market
Every day I see in the financialsection of newspapers how to forecast what themarket will do in 6 months, 12 months, severalyears. "Ten stocks that will double in the next 6months." Right! I have trouble trying to forecastwhat it will do tomorrow. Do not trust any whoclaims he knows what the future will be for themarket. Of course, your broker will send yougobs of slick material about various companiesthat predict they will double or triple in thenext 12 months. On the New York Stock Exchangethere will be about one half of one per cent(0.5%) of companies that will double this year.Are you smart enough to pick those winners? I'mnot and I am considered a professional trader. AndI am sure your broker isn't either. He just wantsto make a commission and is probably promoting astock his brokerage company wants to push. Every investor wants to know thefuture and will send money to some "expert" whowill send him news about a company that only (?)he knows. And pigs can fly. One thing about themarket. It is almost impossible to keep a secretand everyone knows everything about othercompanies. As soon as some "analyst" finds acogent fact that can influence a stock price hewill share that "secret" with a few close friends.Within minutes the "secret" is known by hundredsof thousands and is immediately reflected in theprice of the stock. If you do get sucked into one of thesemoney traps by some smooth-talking salesman ornewspaper verbiage I strongly suggest youimmediately plan your exit strategy. Without anexit plan you can easily lose a large amount ofyour "investment". This is not an investment; itis a gamble and should be treated as such. Thefirst thought of any professional trader is 'if Iam wrong how much am I willing to lose'? Maybe 2%,5%, certainly no more than 10%. Pros understandthat small losses are OK, but never take a bigloss. From 1982 to 2000 it seemed everyonewas a financial genius. How many of those folkskept those big winnings from 2000? Almost none.Most lost 40% to 60% of their money. Brokers said,"Hang in there. You are in for the long haul".Unfortunately he did not tell you that ModernPortfolio Theory is based on a 40 year time line. Yes, but understand you don't need topredict anything. Don't forecast. What you caneasily learn is follow the major trend. You boughtin 1982 and you sold out in 2000. The trend can befound in many ways with the simplest being postedevery day in Investors Business Daily newspaperunder the IBD Mutual Fund Index. When the Indexprice is above the 200-day moving average you ownequities and when it is below you are in cash orbonds. Nothing complicated, Don't try to forecast the market. Let the markettrend tell you. Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make moneyand 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 doesnot want you to know.
MORE RESOURCES:
Stocks-Mutual-Funds - Google News |
|
|
|
RELATED ARTICLES
The Next Bull Market We are already in it, but you can't see it. It doesn't look like the one we had in '99. Trading For A Living - Part 1 There can't be many traders who haven't at least considered the idea of telling the boss what they think of him, throwing it all in and going off to trade the stock market for a living. It's a big risk financially, and that uncertainty is what stops most from jumping ship. Stock Market Investing: Knowing When (and when not) to Sell One of the greatest challenges of investing in stocks is developing a "sell discipline". Some of the most adept investors struggle with the decision of when to sell. Investment Discipline One of the great "secrets" of successful people is discipline and it doesn't make any difference whether it is manufacturing, processing, servicing or investing in the stock market.Before you can have that discipline you must have a successful plan and stick with it. The Top 10 Reasons to Invest in Mutual Funds Everyone who follows the financial news has heard of mutual funds and knows the stock market has generally risen (with various ups-and-downs) for over 200 years. In fact, by most measures, the stock market has made more money for more people, and done it more reliably, than any other investment over the past 100 years! If you want to accumulate substantial wealth, you must include stocks in your investments!But, most people who "invest" don't study the market. Evaluation I An insane person cannot evaluate an insane evaluation system.As you know I have been trying to restore sanity to the insane premises Wall Street has been teaching its brokers and you for all these years. Making a Stock Watch List I am taking the time to help others learn the basics in evaluating stocks for investment using both fundamental and technical analysis. Both tools are equally important in making serious decisions with your hard earned CASH!If you wish to invest in stocks, treat it like a business, NOT A HOBBY. Box Of Chocolates Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one. Market Success Who are the successful investors?There are those who follow the advice of their brokers and financial planners or those who choose to use their own good judgment? If you care to compare the results of the past 4 years from 2000 to now I believe you will see who as done the best job.In the old days at the Chicago stock yards they used to have an old sheep who led the lambs to the slaughter when they arrived on the train. Trading Tips No 2: The Big Lie in the Stock Market It is commonly reported that the stock market averages about 10% per year return over the long term (decades). So the investor that buys and holds a diversified portfolio of stocks or mutual funds is led to believe that their portfolio will grow by 10% per year on average. Intervention Intervention. Now don't let that big word scare you. Performance Funds Mutual funds are doing more and more to discourage investors from leaving them and taking their money to a better performing fund. What does better performing mean? It has nothing to do with who the manager is, what the expense ratio is or how well they performed over the past 5 or 10 years. Acapulco - The Stock Market Dives There is a famous cliff on the ocean in Acapulco where experienced divers jump into the sea. It is very dangerous because the water at the base of the cliff surges from a depth of 2 feet to 12 feet. Complacency Indicator If you haven't heard of the technical indicator with the stock market symbol VIX it is now time to pay some attention to it. When the number is running low, as it is now, around 15 to 18 it means everyone is happy and thinks the stock market is going to continue up or at least continue on its current path and there is no need to sell anything. Trading Stocks -Never Forget About A Past Trade We all know that emotions control every decision that an investor makes in any type of money related vehicle. Whether is be the stock market, real estate, art work or antiques, emotions ultimately set the final price on both sides of the transaction. Stock Market Volatility In my opinion, due to the volatility of stock market prices (the rise and fall of stock prices), an investment plan should incorporate both the traits of stick-to-itiveness and common sense, and must have an advantageous, predetermined approach for maximizing each investment in the stock market.Stick-to-itiveness and common sense - oh, what powerful weapons they are when used for a long-term investment plan in the stock market! They mean making the common sense and advantages decision to:? Purchase only those companies that have long-term histories of raising their dividend every year. Dont Fight The Fed One of the great truisms of Wall Street is "Don't fight the Fed". For the long term investors this has resulted in greater profits. Stock Market Investments If there is one term over-used when talking about makinginvestments in the stock market I would think that termwould be: buy low, sell high.Buy low? Sell high? How low is low and how high is high? Ilike the term buy low, sell dear, much better! But betterstill are the terms buy and hold, and dollar-cost-averaging(buying the same stock at different prices through theyears). No Load Mutual Funds: Investment Hype vs. Investment Help With the internet such a huge part of our daily lives, many investors have access to a wide range of instant investment information.Whether you're into stocks, bonds, mutual funds, futures or options, there are tons of electronic investment newsletters offering to turn your small stake into a giant fortune. 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.
|
| home | site map |
| © 2006 |