Cash

How many people went to a cash position this week? There is no question that this market has scared the bajebers out of many investors, me included. Fortunately, I started going to cash some time ago, but I did give back a substantial amount of my profit.

Your broker never wants you to be in cash. You might take it out or invest it in something else. "Don't worry, the market always comes back." Yes, and pigs can fly. Fund managers are even worse. Because I recommend selling out temporarily and going to cash does not mean I don't have a long-term program. It means I don't want to participate in a down market. CASH IS A POSITION. It is the same as owning Vanguard Index 500 when the market is going up and being in a Money Market Fund earning interest while the market is going down, but not losing your principle. Make sense?

Brokers will tell you over and over that you cannot "time the market". WRONG. Just because they are not smart enough to do it does not mean it cannot be done. I have been doing it for years and have never been caught in a bear market. Even the Federal Reserve Board published a paper saying that "market timing" works. There are timing programs or services that can be bought that are very simple and easy to understand. To protect your retirement funds you must have this in place.

In my column last week I called the market a Stealth Bear. It looks like it has come out of its den. You don't want to be around when the bear is running loose. It can hurt you.

During this past few weeks we have seen some tech stocks lose 80, 90% of their value, but how about good ole Proctor & Gamble dropping 30% in one day? That is a stock held in a high percentage of retirement portfolios and hundreds, if not thousands, of mutual funds. It is going to be a long time before we see new highs in the Nasdaq Composite and the reason is very simple. There are people and fund managers who own many stocks that they would like to sell to get "even". Know anyone like that? This effectively puts a cap on any resurgence back to the top.

I have no idea if the market is going to go lower, but the tendency is toward more selling, not buying. This is a good time to have a position called CASH.

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

al@mutualfundstrategy.com; 1-888-345-7870

---

Downdraft

For the year 2000 we have seen hundreds of mutual... Read More

9 Deadly Trading Mistakes!

The following are a list of nine things you want... Read More

Pathways

During our travel down life's path we come to many... Read More

Stock Options Trading Strategies - Lean

Professional stock options traders use the term lean to refer... Read More

Good News?

As the man said, "I've got some good news and... Read More

Buy and Hold Investment Strategy

"Buy and hold" is one of the most heralded investment... Read More

Never Fall In Love!

Recently I watched my favorite football team lose a vital... Read More

Laws and Efficiencies and Theories of Diminishing Returns

The basis of diminishing return discussions surround such simple notions;... Read More

DIY Portfolio Management

Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More

Economists #2

Economists know more about how the fragments of society work... Read More

Stock Market Investments

If there is one term over-used when talking about making... Read More

Index Fund Trading Using Technical Analysis and Swing Trading Strategies

Index Fund Trading can be one of the most profitable...or... Read More

Mutual Fund Honor Roll ? Buy High, Sell Low by Chasing Performance

Buy high and sell low -- It's not a typo.Millions... Read More

The Seven Mistakes All Novice Traders Make and How to Correct Them

We learnt the following the hard way! If any of... Read More

Is Active Trading The Answer?

One of the main reasons many of us get into... Read More

Trend Trading - Trading Stocks Using Technical Analysis and Swing Trading Strategies

Peter is a professional trader, Paul is not. Peter has... Read More

Stock Loans

Hedge current portfolio positions and gain access to capital resources... Read More

VooDoo Training For the Stock Market

If you go to Haiti or other places in the... Read More

Stock Market Education; Day Trading for Beginnners; How to Pick Stocks

The trading method you employ to approach the stock market... Read More

Stocks & Oil, Sat Jun 18th, 2005

Both the stock market and oil prices rallied recently, which... Read More

Catnip of the Stock Market

I have watched my cat play with a bag of... Read More

Chart Reading

As an investor you will want to check out any... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

Learn to Calculate a Stock?s Pivot Point

Stocks breakout from properly formed bases everyday but many investors... Read More

Price to Earnings Ratio - P/E

After finding the price of a particular stock, usually the... Read More

How To Beat The Mutual Fund Companies At Their Own Game

You'd have had to be living on a desert island... Read More

You Don?t HAVE To Be Trading

As a novice trader, you'll often feel the need to... Read More

How Much Information Do You Need?

You have decided to buy some stock or mutual funds,... Read More

Investing in Trash Company Stocks

Refuse is a serious issue in any society, about as... Read More

Investing in Dividend Paying Stocks

I was recently interviewed for a press release through a... Read More

Eternal Sunshine

There is a current movie entitled "Eternal Sunshine of the... Read More

Quality Investment Information: Standing Firm In the Face of Opposition

THERE'S SOMETHING TO BE SAID FOR standing firm in the... Read More

Why Stock Is More Risky Than Options!

You probably have been told that options are risky. Even... Read More