Keep Your Profits

It looks like we have now entered a new bull phase in the stock market and I have a question for you. Will you give back the profits that you make this time as you did in 2000? You sure don't want to, but you are not going to get any help from your broker.

The investors (Not really the right term. They were gamblers.) had bought stocks and mutual funds during the 90's and seen them have huge advances. They thought they were going to retire early, buy an island in the Caribbean and drink rum and coke all day with no hassels. All of a sudden the bull was attacked and eaten by a grizzly bear. Dreams of comfortable early retirement went up in smoke as the bull was barbequed.

We saw the technology stocks and many mutual funds lose about 80% of their value. Many people did not want to open their monthly brokerage statements and I couldn't blame them. Were there any way those losses could have been avoided? You betcha, but you won't hear that from your broker.

There is what I call portfolio insurance. It doesn't cost any thing and anyone can have it at no charge. Brokerage companies don't want you to use it much less even find out about it. It is a way of protecting your cash from being eaten by that nasty bear.

While the market is going up you don't even think about any financial calamity, but history has shown as far back as you want to look that the stock market goes up and it also goes DOWN. Over long periods of time it does increase at about 6% per year (including dividends and the inflation factor). During the 90's everyone was a financial genius and saw their accounts going up about 12% per year or more. That is not a sustainable pattern. Those periods do occur and are followed by years of declining prices. You don't want to own stock then, do you?

What you have to decide is how much are you willing to give up before you decide to sell. How much of your money are you willing to risk from here where you are right now. Is it 2%, 5%, 10%, 20% or more? In 2000 we saw $200 stocks go down to $5.00. You sure don't want to take that ride again.

After you make your decision you call your broker and tell (not ask) him you want to place a trailing stop loss order of 7% (whatever) on your position. Most assuredly he will try to talk you out of doing it. That 7% (?) is your insurance that you won't have to sit through a 20%, 40% or more down draught.

He will not "watch your account". That is your money not his. If you care about it you are the only one who will watch it. Place your open stop-loss order and keep your profits.

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

---

Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading?

Ever notice how behavior in one area of life can... Read More

The Club

Yesterday I received my monthly issue of MONEY magazine. This... Read More

Nest Eggs and Omelets

Do you have a nest egg? You know, a place... Read More

Why This Bear?

People are constantly asking me why is the stock market... Read More

Buying Mutual Funds

It looks like the market is ready to start up... Read More

Stock Trading Secrets?

How often have you come across an advertisement or e-mail... Read More

How To Buy And Hold

One of the most believed bits of conventional wisdom from... Read More

What is Involved in Peak Performance Trading?

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

How Covered Calls Turned a Trader Around

Sidney felt sick as she looked at her latest OptionsXpress... Read More

How Much Information Do You Need?

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

KISS Formula

There are formulas for just about everything, but it has... Read More

Dont Spend Another Dollar on Business Opportunities Until You Read This

With an insecure job market, overworked employees, insufficient retirement savings... Read More

Dividend Paying Stocks

I would like to share with the reader an article... Read More

Stock Valuation using the SMP Model

Disclaimer: Please note that I do not necessarily purchase, own,... Read More

Lemmings Are Gathering

Before they go over the cliff to their destruction these... Read More

Stocks Options Trading

Let's assume that you want to make some serious money... Read More

Duct Tape

Did you run out to buy that duct tape yet?... Read More

The Stock Market is a Roller Coaster: Prepare for the Ups and Downs

IT'S REMINISCENT OF THE OLD children's tale about an old... Read More

Hot Stock Investing ... How to Pick Hot Stocks with Momentum Stock Trading

Profitable day traders recognize that momentum trading is among the... Read More

Defining a Long-Term Investment in the Stock Market

For some "long term" would mean holding a stock position... Read More

3 Components Needed for Beating the Market

Time to look back2004 is over, now we are in... Read More

Trading Systems

To become a successful trader you must have some kind... Read More

Keep Your Profits

It looks like we have now entered a new bull... Read More

The Inside Scoop on Mutual Fund Rip Offs

The bear market that showed up at the end of... Read More

10 Tips For Creating Wealth From the Stock Market

1. Do not spread your money too thin.My friend has... Read More

Trading Education: The Best of Both Worlds!

I made my very first investment in the stock market... Read More

Investing in the Stock Market - When To!

Is really not as important as to how you invest... Read More

Hot Stock Trader: How to Pick Momentum Stocks with Ease and Simplicity

Most stock traders know that momentum trading can be a... Read More

The Elephant

Four blind men were asked to give a description of... Read More

No Load Mutual Funds: Investment Hype vs. Investment Help

With the internet such a huge part of our daily... Read More

Trading as a Business

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

Shorting Stocks ? The Basics, Part II of II

After the publication of the first part of this two... Read More

9 Deadly Trading Mistakes!

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