Your Worst Enemy To Successful Investing - The Media

How do you make your investment decisions and where do you get your information? If you're like most of the people I know, you look to the experts.

That's fine, however it's important to be aware that for every expert, there's an opinion and for every opinion there's an expert. I have a friend who says that opinions are like noses: everyone has one but you wouldn't live in anyone else's nose!

Around the first of the year, along with the New Year's resolutions, come the New Year predictions for what will be hot and what will not. As if that isn't enough to produce a massive case of information indigestion, now we have the cable financial shows with pretty much the opinion of the hour.

What this is producing is a frenzy of buy and sell activity for stocks in general, and now for mutual funds as well. I don't think this approach serves either the investors in particular or the funds in general.

The big problem with this for mutual fund investors is that all the experts are recommending different funds. It might be one thing if experts had a solid basis for their perspective. If they did, then you would think their recommendations would line up and they'd all be touting the same thing.

But they don't and they aren't. Oh sure, each one of them can make a good case for their pick. But so can the next "expert." And usually both of them won't be right (if either of them is). So, where's the value in this for you? Beats me.

Another problem with this approach is that many experts recommend different funds at different times, and, in an effort to be in the hot fund, investors keep moving from fund to fund.

In the same breath, the experts are telling us to invest for the long term. Well, I can't figure out how to do both: be in the latest hot fund, and hold what I've got for the long haul.

The downside of all of this for the funds is that sometimes a fund touted as the hot one to be in attracts so much investment attention (i.e., money) that it grows beyond its original intention. At that point, it loses its direction and the very thing that made it strong is sacrificed. And guess what happens to the performance?

So, in the midst of all the hawking and hype for this fund or that, what's an investor to do to make intelligent choices?

For myself and my clients I use a trend tracking methodology, which identifies long-term trends in various markets. I research funds for stability and reliability as well as current performance. Then, when our trend indicator signals a Buy, we select our mutual funds based on momentum figures for various time periods to arrive at the most promising fund(s) to use for this cycle.

This gives us a head start and sometimes, weeks after we've bought a fund, I see it written up in financial papers as being one of the best performers.

Does this approach always put us in the number one fund? Maybe not. But we are almost always in funds that are doing very, very well. And do we get in at the bottom and out at the very top? Again, maybe not.

However, I can tell you that, using this methodology, my clients and I followed the sell signal we got in October, 2000, and were safely invested in solid money markets when the stock market crashed and burned.

Is this approach for you? It depends on how much adrenaline rush you like when you watch your investments. Personally, I fulfill my thrill quotient with other things in life and enjoy sleeping at night when it comes to my investments.

About The Author

Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped hundreds of people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit: http://www.successful-investment.com; ulli@successful-investment.com

---

Effective Advice For A New Generation of Investors

CATCHING A FALLING KNIFEOne of the most common mistakes made... Read More

When NOT to Invest

Unfortunately, many investors who are seduced by the lure of... Read More

The Conflict of Interest Game

Disgruntled investors are going after Wall Street once again, this... Read More

Do You Need A Financial Planner?

No matter how much money you make, it pays to... Read More

Useful Tips on Investing

Here are some useful tips on investing. When you make... Read More

Why You Need To Buy and Sell Gold Coins (Part 5)

Grading coinsThe condition of a coin is commonly summarized by... Read More

Making Your Investment Dollars Work for You

Investments are scary for some people, especially those who have... Read More

Economic Survival in the 21st Century - the Three Key Questions to Ask

In this "special report", I want to pose a few... Read More

Finding a Broker

"Hey Joe! I need help finding a broker. I notice... Read More

Which IRA Is Best For You?

An Ira is one of the greatest ways to save... Read More

Eight Questions to Ask Your Financial Advisor

You may like your financial advisor, but is he really... Read More

Success Trading: Some Basic Terminology for New Traders

The world of trading can get very complex because the... Read More

Profitability And Stock Turn Rate

The inventory of the typical store represents the largest single... Read More

Quit and Retire Three Years Earlier!

For most people, there is a direct correlation between how... Read More

Going Against the Conventional Investment Wisdom

First of all, I want to give everyone the disclaimer... Read More

Tyranosaurus Rex

Everyone knows T Rex was the most fearsome of all... Read More

Wit and Wisdom on Money, Wall Street and Success - Part #2

Here are ten more WISDOM packed GEMS that ooffer very... Read More

The 8 Biggest Mistakes When Designing Portfolios - and How To Avoid Them

Are you as good an investor as you think? Do... Read More

Find Your Investing Soulmate on the Jersey Turnpike

As a followup to a previous column, "Irreconcilable Differences," I... Read More

The Key Ingredient To Increase Preconstruction Profits By Over $20,000

One of the greatest preconstruction investing issues that I hear... Read More

How to Setup a Profitable Trading Business

In my opinion trading is the most exciting and best... Read More

The Economys Greatest Depression Downturn Ever Is Now Just A Few Years Away

What really controls the economy? Forget interest rates, forget deficits,... Read More

Wit and Wisdom on Money, Wall Street and Success - Part #1

I love to collect quotes as they concisely promote a... Read More

Sitcom Investing

A fickle stock market encourages good-humored mockery.Recently, as I watched... Read More

Why You Need To Buy and Sell Gold Coins (Part 2)

How to Collect Rare Coins For Fun and ProfitTime has... Read More

Stock Market Horizons: Gold $3,000, Oil $70

In the last two decades, even though gold prices have... Read More

Can Your Annuity Do This?

Many people buy annuities according to their agent's recommendations. However,... Read More

Press Release Scams and Successes: Reading Between the Lines

Press releases are a means through which companies can keep... Read More

Before You Invest You Must Read This

It is important to answer the following questions before you... Read More

How to Analyze the Veracity of Investment Newsletters

When trying to analyze whether a promotional ad for an... Read More

The Benefits of Laddering Your CD Investments

If you've decided to stock some money away in a... Read More

Critical Options Investing Tip When Trading Naked Calls and Puts

An option is a derivative trading product that is best... Read More

Advice for International Investors on How to Safeguard Their Profits

What are the risks?Today, investors are increasingly turning to global... Read More