Investing Trends

If you have got talked to a stock broker or financial contriver in the last few years I will wager they all hold that there are some great deals out there and now is the clip to begin purchasing in expectancy that the market will travel back up. You will also happen understanding from the talking caputs on CNBC and those talking radiocommunication station stock mavens. No 1 states sell. It looks like underside choosers heaven.

A twelvemonth ago when the Nasdaq was 2000 points higher they were telling you the same thing. Buy. Buy. Buy. If they are so smart to get you to purchase now then why weren't they smart adequate to state you to sell when it was manner up there? There are two basic regulations for professional traders: never allow a profitable trade travel to a loss and never take a large loss. The talking caputs are either not people or don't understand their business.

Since the beginning of the twelvemonth the technical school pillory have got lost 34% and from last twelvemonth they are down from the highs 65% and it looks like they are going lower. Isn't it clip to stop the bloodletting and sell? The problem with the small investor is he doesn't believe he have a loss until he sells. Wall Street have taught him that the market 'always come ups back'. Folks, not this time.

All social classes of common finances have got posted losings in the first one-fourth of 2001 for the first clip since 1980.

Has your broker or financial contriver called you to sell out to travel to the safe oasis of a money market fund? I will wager he hasn't. Unfortunately these "experts" are not taught to protect your capital. They will watch their customers' account dwindle away 30%, 40% 50% and more than and never make anything about it. It isn't their money. It is yours. You have got to take the duty to guard it. The average broker have 300 clients. Unless you are a 7-figure account you will not have any attention. Of the 77,000,000 common monetary fund proprietors in the U.S. 80% of those accounts have got less than $50,000. Their advice is either none or bad.

We cognize the economic system is slowing down and have been since early last fall. The market was continuing to travel up in expectancy and was ignoring implicit in facts. The emotional enthusiasm was carrying it to new highs almost every day. Of course, Mr. Greenspan didn't assist anything by raising interest rates when he should have got known better. It is the brokers' occupation to sell stock and do commission, but it should also be his occupation to counsel the neophyte investor to protect his capital.

The tendency is your friend. The tendency is down. It is still not too late to sell and set what's left of your cash in a money market account. Forget about your losses. That money is gone. You must protect what you have got left. Never seek to pick the bottom. There are no "bargains" at this level. Cash is the best place right now.