Adding Funds
|
Someday you may want to retire and continue to live in the life style to which you have become accustomed. According to conventional wisdom you will need less money because you will have fewer expenses than when you had to go to the office every day. Maybe. Let's hope so.
Unfortunately, it doesn't always work out that way so you had better have saved enough cash to supplement the social security and pension plan income (if you have one).
My philosophy is to save with mutual funds as they are the safest way to invest in the stock market. There is one and only one basic criteria as to which mutual funds you should own. That fund or all those funds if you own more than one must be outperforming the S&P500 index (which is just an average) during the last 12 months.
Don't listen to the Wall Street gurus who tell you to buy a "good" fund and stick with it. The only good fund is one that is doing better than an average because you don't want your money doing a below average job. The hogwash you get from the great stock market "experts" is you need to look at how a fund has performed over the last 3, 5 or 10 years. Double hogwash. Ever hear the story about "what have you done for me lately"? It holds true for mutual funds.
Look up the big fund manager names on Wall Street. You will find that in the last 10 years all of them have had periods when they did not do an average job. You don't want to own any of their fund while this guy is going through a 'cold' period.
Every week the Investor's Business Daily paper publishes a list of various funds citing their performance over the past 36 months, 24 months, 12 months, 9 months, 6 months and 30 days. If you have the time and the right brokerage company you can pick the "hot" short term winners and switch from one to another at no commission charge. It does take time and effort.You will trade less frequently and you can get an excellent return on your money if you decide to go with the best performance over the last 12 months and you limit yourself to switching only if your fund falls out of the list..
When you are adding a small amount monthly to your IRA or 401k you will want to specify where those additional funds are to be invested. Always put them in the best performer at the time.
If you own more than one fund, say six, you should sell the weakest one and transfer your money from number six to number one. Sell the dog and invest in the top performer. Prune your portfolio monthly. Every fund manager will tell you this is too simplistic. It works. He is lying. Why? Because he is being paid on the amount of money in his fund and not upon the performance of the fund. It is called 'you buy, he holds'. It is a loser; he is a professional loser. Why should you be a loser too?
Review your funds' performance monthly and stay with the best ones. Retire early.
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
|
|
|
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. It should be pointed out that there are two asset classes below small caps. Micro cap...(related: Stocks)
How We Eluded The Bear Of 2000
The date October 13, 2000 will forever be embedded in my mind. It was the day after our mutual fund trend tracking indicator had broken its long-term trend line and I sold 100% of my clients' invested positions (and my own) and moved the proceeds to the safety of money market accounts. Some people thought we were nuts, but I had come to trust the numbers.The shake out in the stock market, which started in April 2000, had all major indexes coming off their highs, violently followed by just as strong rally attempts. The roller coaster ride was so extreme that even usually slow moving mutual funds behaved as erratically as tech stocks.By October, the markets had settle...(related: Stocks)
The Elephant
Four blind men were asked to give a description of an elephant. They had not seen one or ever encountered such a beast.One grabbed hold of its tail. Another put his arms around a leg. The third gripped its trunk and the fourth walked into the side. The description given by each one was correct and accurate except it did not describe the elephant'...(related: Stocks)
Mutual Fund Ball And Chain
The broker told me not to sell because the mutual fund I owned had a 2% redemption fee and they would penalize me if I did.I got to thinking about it and did some simple math to see what that would cost me if I sold. Several months ago I bought $5,000 of the fund. Fortunately, it was a no-load so I was not charged any commission. It seems that the brokerage house has instituted this fee for the sole purpose of dissuading m...(related: Stocks)
Tips To Finding Other People?s Simple Trading Plans
Did you know you can make money (and a lot of it) by simply modeling someone else's trading plan? Yes, it is true. Unbelievably, there are many of trading gurus doing it RIGHT NOW.All you do is model your system on an already tested and proven trading plan.If you are new to trading, or even if you have been trading a while, this is a secret very few successful traders talk about. You see, many successful traders diversify their trading float by trading other peoples tested systems - because it is so easy to do.There are several reasons to start construction of your own trading system by stealing or borrowing another trading system's ideas and concepts.FIRST, as...(related: Stocks)
Dispelling Illusions Of The Stock Market
How can you dispel an illusion unless you look directly at it? The magician distracts the eye with one hand while he does his manipulation with the other. You are looking in the wrong place and not seeing what is actually happening.Wall Street has mastered this move even beyond the wildest dreams of Houdini. Investors have become...(related: Stocks)
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.On March 1 and March 4 the market came to the p...(related: Stocks)
Trade Stocks For Real
I read a comment by a forum member on another site earlier today that suggested that every investor should back test their system for at least twenty years. I disagree and will now tell you why. Back testing and paper trading seem to be the most over emphasized techniques offered by market theorists, educational elite, market novices and/or mar...(related: Stocks)
Dont Fight The Fed
One of the great truisms of Wall Street is "Don't fight the Fed". For the long term investors this ...(related: Stocks)
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 Essay...(related: Stocks)
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. (ex: a retail outfit can't make money if it doesn't have goods to sell; the sam...(related: Stocks)
site-map - Copyright © 2006 | Contact Webmaster | All Rights Reserved. | Stocks