If you have been watching the stock market at all you are probably very confused. You are not alone. One day is a hundred points up for the DOW and the next a hundred down. What is going on? There are many stocks that are going up and unless you are in the right ones you will be left behind.
The professional money managers divide stocks and mutual funds in sections they call peer group. Many times you will find that while the general market is going down there will be one or several groups that are going up. Also when the market is going up you will find some peer groups that are going in the other direction. Today there are peer groups that are doing very well ? small capitalization value stocks and funds, real estate group and stocks located in emerging markets.
To find individual stocks like these is pretty difficult so I have a professional do it for me. And he does it free. I hire this person to work 60 or 80 hours a week to do my research. If he doesn't do a good job I won't give him any money. He first has to prove to me he knows what he is doing.
Who is this guy that I can get to make me rich and not have to pay him? It is the manager of a no-load mutual fund. Fund managers were paid an average of $275,000 last year so you won't have to feel sorry for him. In my opinion most of them are over paid because last year 90% of all stock mutual funds lost money. It is the other 10% I want to be invested in. Where are they hiding? Why hasn't your broker told you about them?
First, your broker will never tell you about a mutual fund that does not pay him a commission. That is how he makes his living so I can't fault him. There several places you can find excellent funds. If you don't have a computer you may look in Investor's Business Daily newspaper. Once each week they will list the best performing mutual funds for the past 6 months. You will check them with your discount broker to see if they have any commission charge. As long as that fund remains in the top 15 on the list you will have a winner. When it drops below you sell it and buy a better one. Yes, it's that simple.
If you have a computer it is even easier. Go to www.smartmoney.com, click on mutual funds and they will give you a complete list. There are many other web sites with this kind of information.
If you are going to make money in the market you must be in the current strongest peer group sectors at all times. That means that when the fund you own starts down you must get rid of it in favor of one that is going up NOW. Never mind the 3-year and 5-year performance nonsense. With this strange mixed market we have now you must be where the UP action is. The bull is sneaking around very stealthily. You can find out where he is and join him.
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
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