Stocks Mutual Funds Information
| Stocks Mutual Funds Information |
|
|
Next Stocks Mutual Funds Topic : Does Japan Matter? - For the last 12 years we have seen the Japanese stock market slowly sinking from a high of 38,000 to about 8,000, more than a 75% loss and very close to the price of the Dow Jones Industrial Average. Why should we care about their stock market?Please understand that the stock market price is a reflection of the overall economy of a country. ...[ read more]
|
 |
|
Parachute Investing
Ever jumped out of an airplane? It's OK if you have on a parachute. Pretty dumb if you don't. Every buy any stocks, mutual funds or Exchange Traded Funds? It's OK if you know how much you are willing to risk. Pretty dumb if you don't. Parachute investing is buying an equity with a parachute so you won't risk all your money or, better yet, give back the profit you have made as the stock or fund went up and then goes down. If you bought that hummer at $12 per share and during the past couple of years seen it go up to $52 you don't want to give back that nice profit, do you? With a parachute you can save most of it. How? When you invest in any stock of fund you must know how much you will risk before you buy it and how much of the profit you are willing to give back when it turns down. Take that beauty at $12. Instead of going up it went down. Are you willing to agonize as it drops to $5? If you had a parachute you would have jumped out of the plane before it crashed. If you had an exit strategy for your stock you would have sold it before you lost a big chunk of your cash. The secret of a safe investment is an exit strategy. When you bought Mr. Twelve Dollars you shook hands and told him I'd like to be your friend, but if you change your name to Ten Dollars I am leaving. Maybe that that is not very nice, but nice doesn't cut it in the investment world. Mr. Twelve Dollars said I am going up and I want you for my friend. Please follow me and if I falter you can leave and we will part friends. Now that makes sense. You trail along and after it goes to $52 it does falter. Do you know where you are going to leave or are you going to ride it go back down to $12? In other words do you have your parachute on? That parachute is your continuing exit strategy that is in place every day. In the investment community it is called an open trailing stop loss order. Any broker can put this in place for you. You might be lucky enough to have a broker who knows where to place stops, but unfortunately there are not many of them. The brokerage industry does not teach its employees (brokers) how to protect customers' money. If that is the case you might want to use the old standard 10% rule. Have the broker place an open stop every Friday at 10% of the closing price of that day as it closes higher. Never lower the stop loss. Brokers hate this as it makes them work, but that is what they are there for and that is how they earn their commissions. With your parachute you can always protect your original cash purchase from a big loss and as your stock advances you can lock in profit as the stock advances. Every investment should have a parachute. Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and 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 does not want you to know. Copyright 2005
Related Products For Download: Read Next : Does Japan Matter?For the last 12 years we have seen the Japanese stock market slowly sinking from a high of 38,000 to about 8,000, more than a 75% loss and very close to the price of the Dow Jones Industrial Average. Why should we care about their stock market?Please understand that the stock market price is a reflection of the overall economy of a country. ...
|
|
|
|
RELATED ARTICLES
Market Timing Every broker and financial planner will tell you that you cannot time the stock market. I saw John Bogle, the great seer of Vanguard, on CNBC saying it can't be done. Of course, it is easy to understand why he and every other mutual fund manager would say that as they would have a problem managing huge inflows and outflows of money and he was buying and holding during the 18-year bull from 1982 to 2000. Stock Investment Advice Stock investment advice is easy to find. Do you get cold called by brokers with the latest investment tip? I have, as have countless others around the globe. And many of us have lost a lot of money to these people. So, how can you avoid some of these pitfalls? The 10 Commandments Wall Street has been preaching for years and years to investors how and where to put their money. The "experts" have put forth these ideas for so long that they seem to be carved in stone just like Moses did with God's 10 Commandments. The only difference is that what Wall Street preaches is lies that will make you broke. Pension Plans If you have a pension plan at work you will want to read this and if you don't you will still want to because it affects your retirement account. Whitewater Stock Market Ever done any whitewater rafting or canoeing? Long periods of tranquil river followed by short periods of terror. Suddenly the water grips your vessel and you are pushed and shoved by massive currents over which you have no control. Missing boulders you paddle as hard as you can. You almost lose everything and think to yourself, "Why didn't I portage that last rapid?" Dont Spend Another Dollar on Business Opportunities Until You Read This With an insecure job market, overworked employees, insufficient retirement savings and parents wanting the option to stay home with their kids, it is not surprising that many individuals are taking the leap into online business opportunities. Evaluation I An insane person cannot evaluate an insane evaluation system. Financial Crime Congress recently passed another new law that is supposed to outlaw financial crime. Corporate officers will be sent to jail for "cooking the books" as it is called. Among other things it is taking the stockholders money and paying themselves huge bonuses for nonperformance. These guys are even worse than mutual fund managers who do the same thing ? get paid big salaries yet continue to lose your money. The Secret Art of Backtesting If you have not back tested your trading system, you might as well trade with your eyes close. Paddle Your Canoe 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. 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. Why Technical Indicators The fight continues to rage among traders who use technical indicators and those who prefer fundamental information to establish new positions and to exit current positions. Stops Make Money 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. Mousetrap The spring-loaded rat catcher is the ultimate low-tech device invented more than 100 years ago and remains the best demouser in the world. It is so simple anyone can master it and best of all you can keep on using it year in and year out. It always works. Dividends When is a dividend not a dividend? Dividend Reinvestment Plans: Investing on Automatic Pilot If you're like many investors who squander those small dividend checks from your stock portfolio, a Dividend Reinvestment Plan (DRP) might be just what you need. Just as its name implies, a Dividend Reinvestment Plan allows you to reinvest some or all of those dividends into more stock of the issuing company. Unlike purchases made through traditional means, partial or fractional shares, as well as whole shares, are available. 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. This seems to serve the company's profits well and nations like China have quite an emerging population to sell to. Think of the exporting of tobacco and the riches the orient has given. Perhaps this is the answer to our advancing trade deficit. Should you have Starbucks in your portfolio? Frog In The Pot You remember the story about the frog that was put into a pot of cold water on the stove. He was not concerned. Someone lit the burner and the water began getting warm, the frog was very comfortable and as the water became warmer he was so relaxed and complacent that he fell asleep ? never to awaken. Making Outsized Returns in the Stock Market - Using the Dow Theory Investing in Trash Company Stocks Refuse is a serious issue in any society, about as serious as cleaning the water and air, even more so to some degree, especially if you study your history with regards to the plague. This is why it is considered one of the better long-term hold stocks to have in one's portfolio. Today people are living much longer generally due to cleaner living environments, proper trash disposal, sewer treatment plants and a relatively clean civilization.
|
| home | site map |
| © 2006-2007 StockMarketsBlog.com |
