365/7/24

 
What does it take to be a stock trader? It takes a total mentalcommitment to the task. It becomes a complete way of life. You cannot be apart timer. You cannot work at a regular job and trade stocks successfully. When you decide to make your living this way you must be willing to work365 days a year, 7 days each week, 24 hours every day with no time off. Iknow. How do I know? As an exchange member for 17 years and a floor traderI can personally tell you there is no time off. Never. Almost every wakingmoment is given to thinking about your current positions....
 

It Cant Be Done

 
Wouldn't it be nice if you were only in the stock market when it was going up and have everything transferred to cash while it is going down? It is called 'market timing' and your broker or financial planner will tell you "it can't be done". What that person just told you is he doesn't know how to do it. He doesn't know his job. Even the Federal Reserve wrote an article saying that market timing does out perform the S&P500 index which is one of the best market directional indicators. There are many advisory services that offer market timing....
 

Which Way The Market

 
I am hearing predictions by brokers, financial planners, talk show hosts and the talking heads on TV that the market is going back to its old highs - DOW 11,700 and NASDAQ 5000 here we come. It seems to me that in 2000 I heard these same people saying there was no top to the market and were looking into their crystal balls for DOW 30,000 or some other fantastic number. Suddenly the market turned over with the DOW dropping 3,000 points and the NASDAQ losing 80% of its value. Can it happen again? I don't predict and all I can say is the market can do anything....
 

What To Buy Now

 
I am sure that if you have a brokerage account with a "full service" broker you have been getting calls about what to buy and sell. If you have big losses in certain stocks you might be hit with that great Wall Street lie to buy more so you can 'Dollar Cost Average'. It doesn't work. In a recent study going back for 5 years a dollar cost averaging program was set up buying the S&P500 Index mutual fund. At the end of 62 months the investor had put in $31,000 and it was now worth $31,162. You would have done better in a savings account at your bank....
 

Inertia

 
One of the basic laws of physics is that a body in motion will remain in motion unless disturbed by another force. What has this to do with the stock market? For the last 2 years the long-term trend of the market has been down with a few momentary deviations. When a baseball player hits a ball it comes off his bat at full speed and as it makes its arc through the air it slows down and is buffeted by the wind. Sometimes he hits a weak shot and once in a while he gets a home run. You can almost tell when it leaves the bat whether it will be a good one....
 

An Old Proverb for Investing

 
"If you don't know where you are going, any road will get you there." This very much applies to the your retirement plans especially if you are investing in the stock market. The proverb clearly states you need to know where you are going and how to get there. Right now, do you know how much money you are going to need to retire in the style you wish and, right now, do you have a plan to get that money put away? Unfortunately, most people don't. Many are saving, but with no plan. Are you one of those who let his broker or financial planner do the investing for you?...
 

A Funny Thing Happened on the Way to the Stock Market

 
On the 40 year journey through the turmoil of a volatile stock market I've noticed "P/E Ratios," "Consensus Estimates," " Bull and Bear Markets," stock ratings of 1, 2, 3, 4, 5, star ratings of 1, 2, 3, 4, 5. Also, stock ratings of "buy," "strong buy," "sell," "hold;" stock rankings of "market perform," "market outperform," "market underperform," "market underweight," "market overweight,"...
 

The Great Stock Market Secret

 
When the stock market is going up and all your stocks and mutual funds are making money you feel like a genius. It is too bad that some folks don't remember what happened in 2000. Of course, right now we are in one of those genius phases. Your broker and financial planner are encouraging you to buy, buy, buy. And I can't fault that at this time. You remember back in 2000 how many times they told you to buy, buy, buy while the market was going down, down, down. Are we in another of those periods now that are leading up to a humongous crash?...
 

Buy and Hold: How to Perpetuate Your Investment Losses

 
A recent cartoon in my daily newspaper showed two guys sitting in a bar. One is saying to the other: "I did learn something from my broker...how to diversify my investment losses." While this struck me as funny, there is certainly an element of truth to it judging by the number of tragic e-mails and phone calls I have received over the past couple of years. This was brought home even more so by a reader who responded with strong disagreement to one of my articles. I advocate a methodical, disciplined approach to investing in no-load mutual funds....
 

3 Components Needed for Beating the Market

 
Time to look back 2004 is over, now we are in 2005. This is time to seriously look at performance of your personal investment, such as mutual fund, or individual stocks holdings, etc. Does your fund beat index last year? Does it beat index over past many years? How are you doing with your own stock investment comparing to SP&500 index? If the answer is "great", well congratulations. You have your own way of beating market and making big money already. Component # 1 - ego, gut, perseverance Value investing or investing in general is all about psychology, ego, attitude, and gut....
 

Losses, not Profits, will Stop You from Trading in the Market

 
Should the market turn against you, it is important that you design a system that will produce as much loss as you are prepared to take. This loss, known as drawdown, is the maximum amount by which your trading float will temporarily drop at anytime. Doing this in advance, will help you avoid nasty surprises in the future. This gives you the confidence to continue trading when the good times start once more. So how does one pick the best formula for your drawdown time? I will rephrase this question....
 
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