Roller Coaster

I love roller coasters. The steeper the better. High and fast and curvy. Yahoo! Let's go again. But to get to the drop off point you have a slow grind up.

Kinda reminds me of the stock market for the past 3 years. From 1982 to 2000 it was 18 years of up, up and away with very little down. From 2000 it was over the edge, down, down, down with few hints that we are going up. Recently, since October, there has been a respite and we have seen an advance of about 25%. Can we get back to the top? Gosh I hope so, but I have to remember this is a roller coast and it goes back to where it started. Oh, NO! That is OK for amusement rides, but in the stock market that is not amusing.

In the roller coaster I expect to be let off where I got on, but in the stock market I want to stay up near the top because if I don't I will lose my money and that is no fun at all. Is there any way I can protect my money when I am near the top and not give it back to go to the bottom where I have to start all over again?

The first thing you need to know is whether the stock market is going up or down. Despite what Wall Street tells you this is relatively easy to do. I know because I have been doing it for years. Here is one simple way and won't require any work on your part. In the Investor's Business Daily newspaper there is a Mutual Fund Index. When the price of the index is above the 200-day moving average the market is going up and you will want to be a buyer of stocks and mutual funds. What you buy is up to you. When the price of the index is below the 200-day line you should sell out of everything and be in cash, money market account or bonds. That simple. Anyone can do it.

One of the big Wall Street lies is that you cannot time the market. Wrong. If you don't believe it you can prove it to yourself by doing a historical study of what I have just said. Buy as many shares of the S&P500 Index as you can with $10,000 starting back in 1998 and sell the shares each time you have a penetration of the IBD Index. Buy and sell going back as many years as you like. Now compare the amount you have using this method with that same amount if you had just bought it and held it continuously.

I won't tell you, but you will be in for a shock. Buy and hold will show a loss while getting off the down roller coaster each time weakness occurred you would have protected your investments.

Roller coasters can be fun, but not in the stock market.

Al Thomas

Author of "If It Doesn't Go Up, Don't Buy It!"

Never lose money in the stock market again.

http://www.mutualfundmagic.com

---

Its Better

Question: How does it get better when it gets worse?Last... Read More

Mutual Funds are Dead

You may have wondered why your mutual funds have been... Read More

More Window Dressing

Two weeks ago I wrote about what the Securities and... Read More

Trading as a Business

What can I expect to make my first year of... Read More

Complacency Indicator

If you haven't heard of the technical indicator with the... Read More

Stock Market System ... ONLINE STOCK TRADING ... Beyond Day Trading Basics & Tips

Day trading is all about making buy and sell decisions.... Read More

Choosing a Stock Broker

If you were to find that you had some severe... Read More

Gold Fever

Right now there doesn't seem to be any "gold fever".... Read More

Acapulco - The Stock Market Dives

There is a famous cliff on the ocean in Acapulco... Read More

The Stock Market - Part 1: Believe It Or Not, Its Always Been Your Best Friend And Always Will Be

Regardless of the fact that the world's stock markets have... Read More

What the Hell is a Stock option?

A 'stock option' is a contract between two parties giving... Read More

Oil Stocks CHK WLL - What Is Their Worth?

(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More

Performance Funds

Mutual funds are doing more and more to discourage investors... Read More

Emotional Trading

The single most expensive stock market trades are those made... Read More

The Stock Trading Plan - Why You Must Have One To Trade Successfully

This is the continuing story of our two imaginary traders,... 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

Why the Majority Fail at Stock Investing

The gleam and bright lights of Wall Street lure in... Read More

A Funny Thing Happened on the Way to the Stock Market

On the 40 year journey through the turmoil of a... Read More

Zero Sum Game

Most people think the stock market is a zero sum... Read More

The 10 Commandments

Wall Street has been preaching for years and years to... Read More

Stocks: Understand What You Buy!

"There is nothing more frightful than ignorance in action!" Johann... Read More

Option Spread Trading

Spread trading is a technique that can be used to... Read More

Complacency

During the month of January the Dow Jones Industrial Average,... Read More

Two for the Money

Look back over the years and try to remember how... Read More

High Price/Earnings Ratios and the Stock Market: a Personal Odyssey

After some forty years of banking and investments, I retired... Read More

Stock Insurance

You have a lock on your house. You have a... Read More

Selling

The stock market has been going up for more than... Read More

The POWER of a Proven Stock Investment Plan

When you invest in the stock market for ever-increasing cash... Read More

When?

When will the stock market stop going down and start... Read More

Investment Clubs

Because you don't feel too sure about which stock or... Read More

The Exclusive Club of Large Caps

Picture one of those clubs where only the real heavyweights... Read More

Dont Lose All Your Money

That sounds like good advice doesn't it? Don't lose all... Read More

What is Involved in Peak Performance Trading?

There is so much involved in developing peak performance, that... Read More