I have watched my cat play with a bag of catnip. At first he is having fun and slowly he becomes drunk with pleasure and then finally he becomes so tipsy he falls over to sleep it off. The pleasure part is great, but I am not sure if he awakes without a hangover. Rocket (that's his name) reminds me of a one of those people who buy a stock and hold it. At first while it is going up there is great pleasure and then euphoria until they know they are market geniuses. That's the drunken stage. Finally when the market turns against them they fall over not having enough sense to quit (sell) and later when realization returns they have a huge hangover (called hindsight) - and no money....

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Maximizing a stock market investment There are several factors an investor in the stock market should consider for a maximum return on an investment: 1. All stock purchases should be commission-free. 2. All stocks purchased should be from a company that has a history of raising their dividends every year. 3. The company should not only have a history of raising their dividend every year, but should also show price appreciation in the market place, on a year to year basis. 4. All dividends from the companies should be rolled-over into more shares of the company, until retirement....

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During the day I watch CNBC-TV, the stock market channel. Fortunately, I keep the sound muted or I would be hollering at the dumb "experts" being interviewed. The experts seem to know all about the market except they don't know how to protect their capital. Every few minutes there is a chart in bright yellow of some stock showing its price performance during the past year. Lately it seems that most of the stocks have lost from 50% to 80 or 90% of their value. Oh yes, this beauty did go up from 20 to 120, but is now back to 20 or some number very close to erasing almost all of last years profits, many going to a loss....

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Wall Street has been preaching the doctrine of Buy and Hold forever. The worst part about it is the small investor (and some big ones) actually believe it. Brokers and financial planners believe it, but when you show them they can get a better return by timing the market they just say, "It can't be done". They are either lazy or stupid. Most brokers have not learned their trade - investing. Webster says that means putting money into something (stocks) for the purpose of obtaining an income or profit....

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This article describes the model of a natural relationship between trading system performance, trade position size, stop loss settings and profit goals. The model consists of algebraic equations that specify the trade size and stop loss settings needed to meet profit goals over a specified time period for any consistently used trading system for which historical performance data is available. Most of us think of a trailing stop loss when the term money management is mentioned. William O'Neil in his book, "...

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If you're a normal human being, your need to feel good about yourself probably causes you to sell your winners too soon - and -- your need to avoid feelings of regret, causes you to hang on to your losers too long. At one time or another, we're all guilty of letting our emotions dictate our investment decisions. But the only way to succeed in the market, is to keep greed, fear, pride and hope away from your trades. The most successful investors know exactly when they're going to sell a stock, the moment they buy it....

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Have you been listening to the talking heads on CNBC-TV? Or those talk radio stock experts? Getting all those good recommendations on what to buy now. Now? Those guys keep telling me the market is oversold. It can't go any lower. (But it does.) I bet your broker has some hot tips for you too. Advice from a broker is a eulogy for your money. I don't think he has told you about the one position you should have in your account right now. It's a nasty four letter word to him - CASH. In a money market fund it will make you about 5%, maybe 6% and that is better than the bloodletting going on in the market....

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The Surgeon General of the United States says that smoking cigarettes is harmful to your health. It is printed on every pack of smokes you buy. When was the last time a smoker read or paid any attention to it? Don't you wish your brokerage account had some kind of warning telling you when to sell out of a stock or mutual fund that is going down? How about "If this stock falls more than 12% below its highest closing price the Money General says it should be sold and the money reinvested in a different equity"?...

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Trading is a fascinating activity. There are so many layers to it. And so many paths that you can go down. Soon after we first got interested in the stock market I became captivated by technical analysis. I finally felt that I was in control. It gave me great confidence to have all these tools to use. We bought some expensive charting software and I started playing with the hundreds of indicators that it contained. Exotic sounding devices with impossible to understand mathematical formulas. So, armed with all these new tools, I was sure we would be making a killing in no time....

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At some time in your life you have been on a river in a canoe and hopefully you had a paddle. You know about being up the creek without one. You quickly learned that paddling up stream is much harder than paddling down stream. The lesson of going with the flow can be applied to many aspects of life and especially to the stock market. In the creek it is easy to know which way the current is flowing, but in the market it is much more difficult. At least that is what Wall Street wants you to think....

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This is a guide to the different types of mutual funds. When it comes to investing in mutual funds, investors have literally thousands of choices. Before you invest in any given fund, decide whether the investment strategy and risks of the fund are a good fit for you. The first step to successful investing is figuring out your financial goals and risk tolerance - either on your own or with the help of a financial professional. Once you know what you're saving for, when you'll need the money, and how much risk you can tolerate, you can more easily narrow your choices....

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