| |
| |
|
Stocks Mutual Funds | Online-Information-Directory.com |
Home >> Finance >> Stocks Mutual Funds
When Should I Sell?
People are always asking me when should I sell my stock or mutual funds? There are some relatively easy answers to this. In fact, so simple that you won't believe them, but they are things I have learned over the past 30 years as a professional trader on the floor of the commodity exchange in Chicago. These ideas apply equally well to stocks and mutual funds and to just about any kind of investment. First let's examine what the Wall Street mavens tell you about mutual funds. Ever heard this one? Buy a good fund and stick with it even when it is going down. WRONG! Go with a good fund manager and follow him from fund to fund. WRONG! Don't buy the current "hot" fund, as it will go down when this fad is over and you will lose your money. WRONG! Let's look at the one basic reason all these ideas are promoted. The mutual fund industry which is the biggest owner of individual stocks in the world doesn't want you to take your money out of their particular fund so they all band together to promote the above ideas even when you are losing money. Fund managers are not paid for performance. They are paid by the amount of your money the fund keeps. Do you want to stick with anything that is going down in value week after week? The great cry of stockbrokers is, "The market always comes back". But when? In your lifetime? I don't know of any individual fund manager that has made money for the investors every single year. They all run hot and cold, even the best of them. You can put the best jockey on a slow horse and he is not going to win the race. The Wall Street gurus talk about "hot money" flowing from one fund to another and want you to feel guilty just because you want to make more profit. Hey, what is your money in there for - cold pizza? There is one basic rule that will keep you outperforming the pack. If your mutual fund is not currently (meaning in the past 12 months) outperforming the S&P500 Index you should sell it immediately and buy a different no-load fund. Don't buy any fund that charges commission. You can buy directly from the fund itself (phone numbers listed in IBD very day) or through a discount broker such as Waterhouse, Datek, E-Trade and many others. The maximum commission charge should not be more than $25 no matter the size of the buy or sell with no restrictions on how long you must hold it. Where do you find the best performing funds? Each day Investor's Business Daily publishes a list of these funds. Look for the day they publish the top performers for the past 12 months. Don't pay any attention to the longer-term statistics. Each week you should look to see if your fund is still listed in the top 25. If it isn't, sell it and buy the one at the top. Simple. Forget the 3-year, 5-year and 10-year records. My philosophy is 'What have you done for me lately?'. As far as selling stock this is what I do. I keep at 10% trailing stop which I change every Monday morning with my discount broker. The open stop is 10% of the previous Friday's close. This may or may not be the top of the move but I don't care. I'm either stopped out with a small loss or a profit, but my money is always protected. When I have doubled my money I will sell half my position and let the rest ride with the following stop. Protection of your capital is the most important thing you can do. 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. 1-888-345-7870; al@mutualfundstrategy.com
MORE RESOURCES:
Stocks-Mutual-Funds - Google News |
|
|
|
RELATED ARTICLES
A Good Fund Manager Every Wall Street analyst, financial planner and broker will tell you that the right way to pick a mutual fund is find a good money manager of a fund that has a long time record.Yes, I believe that too, but it is amazing that when you go back in time to see what this genius did with the mutual fund, you will find years he has had some terrible losses. Enronization Even if you don't own any of their stock or any stock at all you will want to read this.What Enron corporate officers did with their accounting firm is nothing new. Swing Trading Strategies Using Swing Trading Strategies and Technical Analysis when Trading Stocks to Make Consistent Trading Profits.This article is one small part of a series of lessons using Swing Trading Strategies and Technical Analysis developed by WD Gann which are designed to show how anyone can build a profitable Stock or Commodity trading business from scratch. 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. The Surgeon General 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. Oil Stocks CHK WLL - What Is Their Worth? (1) CHK stock price $16.74, NAV $32. Good Stock Market Tip; Good Return! Forget making a profit; instead focus on the income provided from your stock portfolio. That's right! Forget making a profit. 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. True Investment Road Maps If you don't know where you are going any road will get there. After you get there you might not like where you ended up. "Fears Only Enemy Is Action" What a great statement!I just heard someone use it in the context of personal and financial success and it struck me as a brilliant summary of an issue we raise in the SMG Tutorials.Fear is a huge issue with a lot of traders. Economists In today's volatile and confusing stock markets everyone is searching for a guru who knows which way the market is going and when. Ask any economist and he will have an answer. Mutual Fund Commissions You have heard about a particular mutualfund from a friend, saw it advertised on TV or readabout it in some publication thought it would bea good buy. Next you call your broker to get hisadvice before you buy because he is an expertand is there to help you make money. Duct Tape Did you run out to buy that duct tape yet? Don't forget the plastic sheeting, bottles of water, canned food and a couple of books to read. What are you waiting for? I know - things to get better so you can resume your normal life style. What To Buy? Now that you have some money burning a hole in your pocket and the stock market is going up you have decided to buy some stock or maybe a mutual fund, but you have the momentous decisions to what to buy.At this point you have three decisions to make besides which equity to buy:1. How Covered Calls Turned a Trader Around Sidney felt sick as she looked at her latest OptionsXpress trading statement. In just 8 months, she had managed to turn her $120,000 account balance into less than $70,000. The Club Yesterday I received my monthly issue of MONEY magazine. This issue has the special feature called "The Ultimate Investment Club" that highlights their picks for the top mutual fund managers. Bargain Basement - Finding Stocks That Go Up 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. The Big Bad Bear The big bad bear is stirring again. So far he has stretched, yawned and peaked out of his cave. Why Stock Is More Risky Than Options! You probably have been told that options are risky. Even worse, that you can lose your shirt trading them!Well, what is the truth?Let's take a look at stock ownership. Top 25 Growth Funds On Monday, November 25, 2000 Investor's Business Daily listed on page B1 the Top 25 Growth Mutual Funds for the last 36 months along with their performance for the year 2000 to date. Only four showed a profit this year of 21% and the other three had increases of 12%, 5%, and 5%.
|
|
|
| site map © 2006 Online-Information-Directory.com |
