Today's Market
by Dr Invest

The only thing that makes me more nervous than a downtrend in the market, is an uptrend in the market. A 490 point gain in the DOW is nothing short of unusual. It shows that there is A LOT OF MONEY wanting to go into the market.

I wrote in an earlier blog about how the market is simmular to a beach ball floating on the water. You can pressure it under the water, but when released, it will spring into the air in relationship to the pressure used to keep it under the water. The bad news here is that after the ball shoots into the air, it will have a tendancy to fall back into equilibrium... that is the surface of the water. So these "good times" are not going to last for long. I am hoping we will get one more day because I am not happy with the characteristics of FDO (family dollar) and want to sell that stock as soon as possible.

Let's look once again at my selection of stocks and their performance to-date.

                                                  BUY                 ON MONDAY           YESTERDAY          TODAY
FDO (Family Dollar)                $58.8193            loss 4.12%                         loss 3.34%       gain   .68%
DLTR (Dollar Tree)                  $79.20                loss 2.75%                         gain   .53%      gain 2.81%
CATM (Cardtronics ATMs)     $24.81                 loss .32%                          gain 2.01%      gain 9.42%

This is the pace of the stock market. The market is so volatile that the slightest bad news will demolish any gains you might have. How the market will rise is also unpredictable. You can't afford to let your emotions rule you. FOLLOW THE RULES and you will find success. If you are undisciplined, impatient, and greedy, choose another profession because you are going to lose a whole lot of money.

Inspite of the impressive gains on my selected stocks, I am very nervous. I know what comes next, several days of downtrend. At this point I need to consider how I want to leave the market. Putting the trailing-stop or stop-sell nearer the closing price will do the trick and I can leave the maket with some profit.

Again, leaving the market too early because of your emotions also shows a lack of personal discipline. I will carefully watch the market until Friday, hoping that the remainder of the week results in my stocks growing just a bit more.

Remember, ALL MY STOCKS WERE DOWN LAST WEEK 5%. Adding that 5% to the present gains shows how much the market has grown this week. CATM has grown a remarkable 14.42% in the past 5 trading days. DLTR has grown a remarkable 7.81% over the past 5 trading days. I can't imagine the market keeping this pace much longer, but the present view is that Black Friday and Cyber Monday have produced results out pacing the analysts expectations and that the remainder of the Christmas Season will produce outstanding sales.

For all the excitement, one still has to remain aware that Italy, Spain, and Greece are still near collapse. All of the promises to underpin the EuroEconomies will likely falter in the near future (by February or March), so I would be careful not to get too excited by increased temporary Christmas hiring.

I am still recommending: STAY OUT OF THE MARKET!

(note: The above article is soley for entertainment purposes and not to be use for any investment purposes.)

Today's Market
by Dr Invest

Oh, how emotions change when your stocks go up. Yesterday, I was in hell and today I'm moving into heaven. Remember, these are just feelings. You can't trust them.

Investing requires more than just feelings; it requires a WELL THOUGHT THROUGH PLAN. Any plan must have rules. Rules will get you out of the investment before you are hurt too deeply by major financial losses. Rules will also keep you in the game, long enough to see your investment bring a profit. This is important, especially at this moment of Stock Market History.

Since the end of 1999, the stock market has gained only .83% per year, over the past 12 years. Look at the graph I've provided. If you have used a BUY and HOLD method, you have lost money. Let me tell you why. About 87% of the financial advisors & brokers can't beat the DOW index, and they often fall short of beating the index anywhere from 10 to 20%. This is PATHETIC!

The PIMCO BOND FUND founder, Bill Gross, sent his investors a letter of apology. This is unheard of.   Bill Gross, manager of the world’s largest bond fund, said it will take years for Europe to recover from its current economic woes and investors should not count on any short-term fixes.

He said that ‘debt-driven growth is a flawed business model’ and the older, developed countries are now paying the price for issuing too much sovereign debt. (Just like us in the U.S. *my words) And he contines, financial markets and society no longer have an appetite for it.’

He predicted that global growth will likely remain stunted, with interest rates artificially low and investors continually disenchanted with returns that fail to match expectations. He suggests that with 2% inflation and 2% growth of the market, the best one can expect is 0%. So he is saying that a 2% return on your investment over the coming years would be an at best scenario. (Go to the PIMCO website to view his letter.)

So with such poor results, the future doesn't look that promising. There are no guarantees when it comes to investments in stocks, you can loose substancial amounts of money. But a carefully though-out plan may result in 6%, 8%, or even a 10% return. And that is the reason for this blog. To help you develop your own trading style, that can consistently return you money and diminish your losses.

Back to my STUPID CHRISTMAS RALLY STOCK INVESTMENT. Here are the results of the day:

                                               BUY                        YESTERDAY                 TODAY
FDO (Family Dollar)            $58.8193                              loss 4.12%                       loss  3.34%
DLTR (Dollar Tree)              $79.20                                  loss 2.75%                       gain  .53%
CATM (Cardtronics ATMs) $24.81                                    loss .32%                       gain 2.01%
                                                                                                               

Bottomline, STAY OUT OF THE MARKET. The market is extremely volatile and with the Europe Factor, the market could collapse at any moment. I am fortunate that CATM gained over 6% in the past two days. After calculating my brokerage costs for CATM, I have a gain of 2.01%. For information sake, if it costs me $3$to buy and $3 to sell, I enter the total brokerage costs to buy and sell at $6. When I look at the percentage of return or loss, I am looking at costs of brokerage fees deducted from that percentage. So the LOSS shown above, includes my brokerage fees added and the GAIN shown above includes my brokerage fees deducted.

DLTR unexpectedly gained 3.23% today. FDO gained a little over 1%, which is still a remarkable increase. Of course, the problem is that when you are down 5%, you have to see your stock gain 10% to provide a 4% profit, because some of that profit is going to pay brokerage fees. The more you invest at one time, causes the brokerage fee to be very nominal.

I started investing with only $2,000 and the $10 fee to buy and $10 fee to sell wiped 1% to 2% off of my initial profit. With discount brokerages like OptionsHouse, the total fees to buy and sell combined are reduced to only $8.

(note: The above article is soley for entertainment purposes and not to be used as investment advice.)

Today's Market
by Dr Invest

Let me be clear, STAY OUT OF THE MARKET! My portfolio is largely in cash, about a third of the entire portfolio is in BOND FUND ETFs. (TIP and BND) By checking out the side-bar, you can see ideas on how to diversity your investment. I utilize a method of putting 1/3 into STOCKS, 1/3 into BONDS, and 1/3 into CASH. Because I actively manage my portfolio, I may invest more into either STOCKS or BONDS if they are returning higher profits.

The problem faced today by most investors is that STOCKS are incredibly volatile with daily swings plus or minus 200 points on the DOW. Though the DOW has slowly climbed over the past three months, world news of impending financial defaults and high unemployment continue to push us toward impending recession. Though unemployment remains high in the U.S. and our economic growth patheticaly low, our politicians keep spending like there is no tomorrow and do nothing to reduce the current debt.

Many people, and myself also, have moved into BONDS. But our government has made sure that BONDS are at an all-time low. With a glut of money flowing into BONDS, we have created a BOND BUBBLE. Our economy is so stagnant and stocks so volatile, that BONDS seem the only place to be. But when the market heats up enough to drive inflation just a bit higher, BONDS will seem worthless at their present rate. A large investment company notified their BOND clients, that they could be moving some of the BOND investment into STOCKS in the days ahead; suggesting that their BOND portfolio would no longer be a pure bond portfolio, but a mix. The BOND COMPANY already understands that if the market heats-up, they cannot remain profitable.

Of course, my suggestion is to make careful investments into stocks and bonds, placing a 6% stop-loss or trailing stop behind the initial investment. Such an investment is to only be made when there is a clear up-trend. (see the other pages in the sidebar for instructions and read through this blog)

Like most investors, I am constantly looking for investment opportunities. Some of the opportunities will result in profits, others in losses.

SECRET STOCKS

There really are "secret stocks" out there. Most are unknown or not very flashy, but consistently give the investor solid returns. Richard Shaw noted 4 stocks that outperformed the market since 2001. Here is part of his article:

How many individual stocks met or exceeded the performance of the best ETFs and mutual funds over the 10 years and 10 months from the beginning of 2001 through October 31, 2011? The answer is four -- only four.

They are:

• Healthcare Services Group (HCSG)
• Plains All American Pipelines (PAA)
• Ventas (VTR)
• Magellan Midstream (MMP)

The measure they exceeded was to have an equal or higher total return in each of the calendar year periods from 2001 forward than the median total return of all equity ETFs and no-load equity mutual funds that were in existence over the entire period.

Now you need to continue to do your own research to determine the long-term viability of these stocks, but these so called: "secret stocks" could prove to viable addtions to your stock portfolio. I am not invested in these stocks at this time and I would likely wait until I see where the market is headed by February of 2012 before investing in any of these stocks, but they are on my STOCK RADAR.

About My Stock Investment

In mid-November, I invested in three stocks, hoping to catch a Christmas Rally. I knew the stock market was dicey and stocks volatile, but the three stocks I had chosen should have been a "shew-in". What I couldn't have predicted is the effect that our politicians and Europe would have on the trend of the market. I invested into three stocks: CATM, DLTR, and FDO. CATM is an ATM company with an incredible outlook and had already returned a profit of about 28% for me, so reinvesting in a winner as it returned to an uptrend in October seemed very comfortable to me. Dollar Tree and Family Dollar are both "dollar stores", with Dollar Tree out-performing the analysts estimates again and again. Dollar Tree and Family Dollar have had offers for buy-outs. Dollar Tree is wanted by Walmart, but Dollar Tree has resisted all offers for a buy-out. Dollar Tree also returns a lot of cash because it is not heavily leveraged. There are no reasons for these three stocks to not return 6 to 8% by the end of the year.

Since repetition is the price for learning, you have heard me say: The market doesn't care what anyone thinks the price of a stock should be, it is the market that determines the price of a stock. So THE MARKET IS ALWAYS RIGHT, regardless of anyone elses opinion.

Knowing that my investments were covered by a 6% trailing-stop, I have worried little about them. I do watch these three stocks and as of last Friday, all three of them neared the 6% trailing-stop. FDO had been slowly declining in price since I bought it and as the market slid downward last week, I was certain that FDO would sell. Remarkably, FDO gained in price as the overall market moved downward. Remember, the market is always right.

I was glad that I had RULES. Rule one, determine how much money you are willing to loose. I had determined 6% was as much as I could loose, but was hoping for a 6% gain. Rule two, place a stop-sell or trailing-stop on your investment. This limits your loss to the 6% should the stock turn downward. Rule three, be patient. It takes time for a stock to grow.

So, today, I am just thankful that I am less in the RED than I was last week.

                                       BUY                        TODAY
FDO (Family Dollar)            $58.8193                                           loss 4.12%
DLTR (Dollar Tree)              $79.20                                               loss 2.75%
CATM (Cardtronics ATMs) $24.81                                               loss   .32%
                                                                                                                

How do you say, "I'm thrilled with my losses?" But considering that the entire losses on CATM was nearly erased and that the dollar stores gained over 1% today, I am enthusiastic. What is really needed is a week of the same kind of advancement in the stock market. Now that would make me estatic. 

I will keep you informed about my progress in these stock investments. A week of good news could well pull me back into black. 

(note: the above article is soley for entertainment purposes and not to be used in any way as investment advice.) 

STAY OUT OF THE MARKET!

Today's Market
Dr Invest

I know you have been following my blog and wondering if such a dramatic drop in the market today, caused my stocks to sell. Here is the remarkable part, FDO (Family Dollar) actually grew in value today. Remember the phrase, "IRRATIONAL MARKET". FDO had been declining ever since I purchased it. It is "irrational" that when the market falls 300 points, only rising a little at the end of the day, that FDO gains .85% .  My emotions would have moved me to sell FDO after the first week.

All of the stocks that I purchased have remarkable fundamentals and should have grown 12 to 15% in a normal market. DLTR (Dollar Store) declined only .36% finishing the day with my loss of 4.50%. CATM (Cardtronics ATM) declined a whopping 5.05% today, but because it had shown a profit, my day ended with a loss of only 1.69%.

The reason you develop TRADING RULES is so you disengage your emotion. Experience teaches you that a 6 or 8% loss can EASILY be regained. Take your loss and come back another day when the market is better. When I entered the market, I KNEW THAT IT WAS VOLATILE. I didn't invest my total nest egg into the market, only enough to make a small profit, if I reached the 6% goal before the end of the year. Even if my stocks sell at a 6% loss, I know that I am not going to loose a lot of money.

If the market is destined to collapse, falling 30 to 40%, I'll re-enter the market when it bounces off the bottom. Better yet, I'll use a reverse ETF and catch a little profit on the way down. But always, I will use the same TRADING RULES to protect my investment.

Today was BAD. STAY OUT OF THE MARKET! I am amazed that I survived the day. Professional investors want to "run for the doors", but they must show their clients why they are paying for a broker. They have to stay in the market, even in the face of bad news with BLACK FRIDAY nearing. I believe that institutional traders saw a buying opportunity today to pick up the "dollar stores" and gain a post Black Friday bounce.

Trading requires experience, understanding, and favor from someone greater than you. That is why in times like these, I find PRAYER a positive comrade at the trading table.

(Note: The above article is soley for entertainment purposes and not to be used to make financial decisions of any kind.)

Today's Market
by Dr Invest

My Investments

I haven't been very happy with this week. I've just been keeping my nose above the water. The Market continues its UPs and DOWNs and for this week, it has been mostly down. NEVER FORGET THE RULES OF YOUR TRADE! No matter how you feel, follow the rules.  I have a STOP-SELL set for each stock at 6% below the purchase price. It really doesn't matter where the market goes, 6% is what I have determined as my loss. If my losses exceed 6%, the stocks will automatically sell.



Several times, as the market plummeted, I wanted to sell my stocks and get-out. But when you let your emotions rule your trades, you will have no rules. After a week of a collapsing market, my selected stocks have remained above the 6% stop-sell. FDO dipped 5.08% below the purchase price and I thought today would be the day it would sell at a 6% loss. Recent news of FDO (Family Dollar) out performing the market and FDO raising its expectations above the analysts projections kept FDO alive. Even in today's falling market, FDO actually grew.

Reviewing the three stocks I selected, I am convinced that they are quality stocks. But remember, the market doesn't care what I think or even what are the evident facts. The market sets its price and you live with the price set by the market. The market is the sole determinate of whether it will move up or down.

For instructional purposes, we have had some terrible things happen this year and the market simply barreled through ignoring the facts; other times in 2011, the only reasonable direction for the market was up, but it went down. If I could understand this market behavior, I could be a millionaaire in short order. Throw into the market volatile one day swings of 300 points on the DOW and you have to ask yourself, how can anyone stay in the market.

By setting the loss to 6%, you stay in the market long enough to identify the real trend of the market. I have seen FDO, DLTR, and CATM rise 2, 3, even 4% in one day. I can sleep at night, because I know that 6% is all that I will loose if the market remains ugly. If it remains ugly long enough, we will revisit 10,000 on the DOW and I will re-purchase FDO, DLTR, and CATM and enjoy the ride up.

Back to reality here:

                                                                                   BUY                                                   14 DAYS LATER
FDO (Family Dollar)              $58.8193                                          loss 3.90%
DLTR (Dollar Tree)                $79.20                                              loss 4.16%
CATM (Cardtronics ATMs)   $24.81                                              gain 3.54%
                                                                                                                 

Maybe, just maybe, I can stand one more day of loss. Remember, this morning, FDO was at a 5.08% loss. Climbing the paltry 1.25% kept FDO alive, even if for only one or two more days.

Listen carefully to my recommendation on how you can make money in the market. STAY OUT! The market is irrational right now, don't buy into the market. The market will return to a more sensible trend, but just not anytime soon. WARNING, STAY OUT!

(Note: The above article is for entertainment purposes only and not to be used as finanical advice.)

Your Real Potential for Long-Term Growth

by Dr Invest

What is your real potential for long-term growth in the stock market?  If you don't understand the dangers of BUY and HOLD, you will get stung in today's market. This doesn't do away with a BUY and HOLD STRATEGY, but unless there are real fundamental changes we are unlikely to see a return to the good old days.

To survive the days ahead you are going to need to learn how to mange your own investments.  Over the past 12 years, the DOW has moved from 11,400 to 12,400 today. That is an average of about .83% gain per year.  Today, a CD can return 1.10% per year.

                                      Look at the HORIZONTAL LINE

What I am Illustrating is that over the years, until around 1999-2000, the market has given the long-term investor the promised returns of 10-12%, but in the last 12 years, the market has changed. The PROMISE by INVESTMENT ADVISORS of an 8, 10, or 12% return is impossible over the long-term and IS A LIE!  You no longer can invest money and expect it to increase if you are using the LONG-TERM BUY and HOLD INVESTMENT STRATEGY.  At this point, this kind of strategy is a BUY and HOPE STRATEGY. If you invested into the DOW index fund in January of 2000, the maximum return would have been only 10% over a 12 year period or .83% per year.

Until our own national debt problem is resolved, we will not be able to break through the DOW plateau. And most importantly, we will never see the long-term gains we once had. The market has changed and investment advisors looking backward to average in 50 years of "good times" are blind to where our market really sits at this moment.

From a technical perspective, the above DJI appears to be consolidating and either the market will break-up  or break-down after the consolidation period. We had a similar consolidation pattern from 1975-85, a twenty-year period. So, this present period of consolidation could last another 8 to 10 years. If you are a baby-boomer, this could be a real baby-bummer, prolonging the period you will need to work before retiring.

The Market this Week

All markets are EXTREMELY VOLATILE at this moment. There is a possibility for a brief rally until the end of December or the first part of January. The ongoing fears of the EURO-DEBT continue to make the stock market choppy. There is a BUBBLE in BONDS and unlike the preceding years, BONDS are loosing money.

Although some head-way has been made in an agreement for austerity in Greece and Italy, there is little hope that either country can successfully meet the goals set by the EURO-TRIBE. So the expectation is that around FEBRUARY of 2012 the ongoing drag of Europe will pull the world into a double-dip recession.  Look at the chart below:
   
Here are a chart and a graph showing the PIIGS' and the United States' indebtedness -- more specifically, their public debt and 2009 deficit relative to GDP.

Just glancing at the chart, and remembering that the PIIGS are among the weakest economies in Europe, it seems that the United States isn't in great shape either. It's just on par with Spain, whose economy is struggling.

The difference with the U.S. is that the DOLLAR in comparison to other currencies is still strong and the DOLLAR is considered a safe-haven if you want to move from a weakening currency to a stronger currency like the DOLLAR. Greece and Italy are about equal in debt, but a closer look shows Italy worse-off. Both Greece and Italy are close to collapse. I am hoping for a solution, but risking your life savings in hopes of a solution is unwise.

In Austin, Texas is a little investment firm called, Hoisington Management.   Here is what you need to enter on your address bar:  <http://www.hoisingtonmgt.com/hoisington_economic_overview.html>   or just click on the label enclosed.  When you arrive at their webpage, select: Quarterly Review and Outlook, Third Quarter.  With 4.5 BILLION under management, I think they have cutting edge research.  READ the THIRD QUARTER OUTLOOK for 2011. You get the benefit of a quality research paper without the $60 per month fee.

Where should I put my money in the short-term?

I am invested in three stocks, FDO, DLTR, and CATM. (Family Dollar Store, Dollar Tree Stores, and Cardtronics ATM. I am also invested at this moment in TIP and BND which are ETF bond funds. TIP is the best performing ETF bond fund at this time.

Make no mistake, I have STOP-SELLs placed on each of these stocks and bonds. If a sudden down turn occurs in the market, these stocks and bonds will sell. So my investments are actively managed. (look up STOP-SELL on investopedia) My only risk is with FDO, DLTR, and CATM. After a week of being invested in these stocks, I am not fully satisfied with the tepid growth in these stocks since their purchase, excepting CATM.

I am following specific trading rules and will not leave the market until the 6% stop-limit is reached or a profit is taken. My fears and emotions have no influence on the rules of the trade.

What is important, is that NOW IS NOT THE TIME TO BE IN THE MARKET. The present market is too sluggish to be certain of a profit. If the market does turn-down in February of 2012, you could loose 20, 30, or 40% of your portfolio.

My Suggestion, buy Certificates of Deposit

Go to GOOGLE ADVISER and select: CDs. Enter in the amount you would like to put into CDs and the length of the investment. Google will show you the best prices for CDs.
<https://www.google.com/advisor/uscd?bsp&s=1&kw=best%20CD%20rates&group=GenericRadio&q=best+cd+rates#!search&Issuer_S=__any__&Normalized+Term+Length_R=0_1001&Deposit_D=100000&CD+Type_S=Normal&Zipcode_S=78626&si=0&start=0>

This will help you select the best CDs at this time for a CD ladder. As mentioned, don't put more than $100,000 at any banking institution for FDIC purposes. Even if you get less interest, it is worth it to limit your CD to $100,000.  Depending on your investment, divide it into 8 parts (placing 6 of those parts into CDs) putting part into CDs and keeping part in a brokerage account to invest should the market begin to rise. I would suggest that you have 3, 6, and 12 month CDs initially. If we are going into a double-dip recession, we will revisit the lows of 2008. When that journey downward is complete, it would be a good time to reinvest into the market.


(Note: The above article is for entertainment purposes only and not to be used to make any finanical decision.)

Today's Market
by Dr Invest

My Investments

My investment continues its UPs and DOWNs. I have a STOP-SELL set for each stock at 6% below the purchase price. Below are the three stocks I have chosen during what I hope will be a Christmas Rally. If my losses exceed 6%, the stocks will automatically sell and I'll drink my hot chocolate in a corner by myself; but if I get the 6 to 8% return I hope to get, I will put another pice of cake on my plate and giggle a loud, Ho! Ho! Ho!

Back to reality here:

                                                               BUY                                        NINE DAYS LATER
FDO (Family Dollar)              $58.8193                                         loss 2.66%
DLTR (Dollar Tree)                $79.20                                             loss 1.20%
CATM (Cardtronics ATMs)   $24.81                                             gain 6.85%
                                                                                                                2.99% Total Gain

As of today, I have gained a total of 2.99% in the overall stock porfolio after trading fees. I had expected better from the DOLLAR STORE STOCKS. As the market moved higher today at the report of increased retail sales, I was surprised the the Dollar Store Stocks did not dramatically rise. As you can see, I am no where near a 6% loss on any one stock, but my safety net remains in place just in case the market turns ugly.

(note: The above information is not to be used for any finanical advice, see your personal financial advisor before making any decisions regarding your finances.)

Today's Market
by Dr Invest

Welcome to the stock market. This week the DOW has fallen almost 400 points in one day and in the last two days, returned about as much. If you can't take the heat, stay out of the kitchen.


Back to reality here:

                                                                                                 BUY                                FRIDAY
FDO (Family Dollar)                   $58.8193                        loss 1.06%
DLTR (Dollar Tree)                     $79.20                           gain 1.03%
CATM (Cardtronics ATMs)        $24.81                           gain 8.38%
                                                                                                   8.35% Total Gain

As of today, I have gained a total of 1.35% in the overall stock porfolio after trading fees. I want you to journey with me in this trade during the end of 2011. By following my blog each day, you will sense what it is like to wait for a stock to become profitable. All of my stocks gained today, but previous losses had to be absorbed. FDO or Family Dollar Store has not yet broken even. The goal is to see all of the stocks become profitable.

I am not disappointed with how the week ended, but hope at we move toward Christmas, the Dollar Store stocks will ignite and meet my goal of earning 6% before the end of the year on the total investment I have made into stocks.

With the fears of the Euro collapse abating because of recent political resolutions in Italy and Greece, it seems that the way is open for the market in the U.S. to move upward.

(note: The above article is for entertainment purposes only and not to be used to make finanical decisions.)

Today's Market
by Dr Invest
Today the market returned a very shallow bounce of a little less than 1%. The stock I chose didn't blossom, but in such a pathetic market I really didn't expect more. Greece and Italy have proven a drag to any upward momentum in the market. The overall negative feeling that Greece and Italy have created in the market has elevated the VIX. (the fear index)

With the likelihood that Italy's debt will wreck the Euro and a default is only months away, the fear is that the world economy will slip into a double-dip recession. I still have enough conviction about a Christmas Rally, not to sell and run. Of course, most importantly, that conviction is only 6% deep because if my purchase price of these stocks fall 6% below the purchase price they will automatically sell.

Because repetition is the price of learning and your success in trading is based upon RULES, the first rule is: "Don't Lose Money!" The second rule is: "Never buy a stock without determining how much you will allow yourself to loose!" (You do that buy placing a STOP-SELL on the stock you purchased.) You want to maintain CONTROL of your LOSSES and your PROFITS. Remember that successful trading is about money management.

Most Financial Advisors DO NOT ACTIVELY MANAGE YOUR INVESTMENTS, but actively manange their FEES and PROFITS from your investments. I learned of a court case in which a financial advisor was sued for pointing a client to the financial instruments which returned the highest fees to the advisor. The client's claim was the Financial Advisor has a fiduciary reponsibility to represent the client's interests first. Ney, my friend. The court ruled in the favor of the Financial Advisor, thus re-affirming that the Advisor could move the client's money toward any instrument he wished eventhough it negatively impacted the client with higher fees. Listen to me, your Financial Advisor can charge you management fees eventhough his management of your money had a negative result. Is there another profession that you can enter, where you can damage someone financially and still charge them 2% annually for managing their life savings? (2% of $500K=$10,000 annually. 200 clients X $10,000=$2,000,000 annually. Average number of clients for a financial advisor is 200-500. Now you know the rest of the story. In fairness, office, salespersons, accountants, secretaries, and licenses come out of the 1 1/2 to 2 million. Finanical and Wealth Consultant's salaries can range between $90k to $120k. A senior consultant can make more depending upon the clients he has acquired. )

By using a BROKERAGE ACCOUNT, selecting your own investment instruments, and contolling your losses, you can avoid the FRONT-END and REAR-END fees and QUARTERLY fees charged by an Advisor. Over a ten year period, even a small savings of $200k that is managed by an advisor can amount to $43,799.00. Double the $43,799 to $87,597 if you have a nest egg of $400k.

Back to reality here:

                                                      BUY                THURSDAY
FDO (Family Dollar)                 $58.8193              loss 1.83%    
DLTR (Dollar Tree)                   $79.20                 loss 1.75%
CATM (Cardtronics ATMs)      $24.81                 gain 5.16%
                                                                                       1.58% Total Gain

As of today, I have gained a total of  1.58% in the overall stock porfolio.

The return not particularly remarkable after four days, but still afloat after one of the largest one day drops in 2011.

(Note: The above article is soley for entertainment purposes and should not be considered financial advice.) 

Today's Market
by Dr Invest

Look, I know this is what you have been waiting for. Now that shame has come upon, I humbly acknowlege what everyone already knows: "The market is not predictable."

If you have been following my blog, you will know that I purchased three stocks: FDO, DLTR, and CATM. Today was a SLAM as the DOW sunk 400 points and barely climbed upward toward the end of the trading day.

That is the very reason, that I use a 6% stop-sell whenever I buy a stock... so I can preserve my capital.

                                                         MONDAY    TUESDAY         WEDNESDAY
FDO (Family Dollar)                        lost .08%      gained   .08%        lost 2.41%
DLTR (Dollar Tree)                         lost .56%       gained 1.43%        lost 1.43%
CATM (Cardtronics ATMs)      gained 1.08%      gained 8.22%        lost 3.78%
                                                                .44% gain           9.73% gain       7.62 loss  2.11%  total gain

As of today, I have gained a total of  2.11% in the overall stock porfolio.

I admit, this is exciting. How will this investment end? Will I see a recovery by the weekend or will my stocks sell? As an investor, I have a conviction that the market will rally... but only  a 6% conviction. Another 3% loss and my seasonal investing will be brought nearly to an end.

This is how I have chosen to trade, I follow my rules regardless of what I think the market will do. If the market falls more than 6%, my stock is sold.... if the market continues to rise, my stock is hold.

(Note: The above article is for entertainment purposes only and not to be considered as investment advice.)

Today's Market
by Dr Invest


Today's market started in the negative as the market comptemplated Italy and its political woes. Before the end of the day, a promise of resignation by the Italian Prime Minister brought a rebound in the market. Friday, I invested into FDO, DLTR, and CATM. I am taking a risk that the EuroTribe will workout their debt relief plan and that we will see a seasonal rally during the last two months of this year. Here are the results at the end of the trading session on Tuesday.


YESTERDAY                                                                    TODAY

FDO (Family Dollar)                   lost .08%                       gained   .08%
DLTR (Dollar Tree)                     lost .56%                       gained 1.43%
CATM (Cardtronics ATMs) gained 1.08%                       gained  8.22%
                                                            .44% gain                            9.73% gain    10.17% total gain

As of today, I have gained a total of  10.17% in the overall stock porfolio.

I have chosen a 6% stop-sell. If the stocks continue to grow, I will move my stop-sell behind the closing price.

I have said that it is not the opinons of analysts or politicians that determine the trend of the market. The market is the sole determinate of its price.

What is key to seeing gains in your portfolio is "active portfolio management".  Active portfolio management is not "timing the market" nor "day trading".   Active portfolio management is OBSERVING, IDENTIFYING TRENDING STOCKS or BONDS, then BUYING or SELLING both bonds and stocks when there is a clear trend change. The purchase of STOCKS or BONDS is based upon strict rules. When the rules are followed, the opportunities for success is enhanced.

Please note, that at a 6% stop-sell, CATM would presently return 3% profit if the market turned down. That means that at this time CATM is profitable. I would like to see CATM continue an upward trend with the a return of 15 to 20% . 

There seems to be some return in FDO and DLTR and I would settle for a mere 6% over the next two months. So here's the truth, in such a volatile market, you can't really predict where the price will be two days from now. You can hope that it will continue to climb until the end of the week an set your stop-sell price. To just break even, your stock's price will need to rise about 7%. The exception would be if you simply wanted to sell the stock once it had climbed 4% above the purchase price. In that case, your 6% stop-sell is the safety net, but if a market downtrend is looming, you sell the stock for the best price you can get.

Better yet, make good judgments in the first place and hope for gains that can let you move your trailing stop (stop-sell) to a place of profitablity.

(note: The above article is soley for entertainment purposes and not to be used as financial advice under any circumstances.)

Today's Market
by Dr Invest


I can't say that the water is fine. In fact, it is just a bit tepid. Friday, I invested into FDO, DLTR, and CATM. I had anticipated that Greece would work out their problems to open the way for the EuroPlan to be implemented. All that I need is two months of seasonal growth to see a 6 to 8% gain in carefully selected stocks.

What I had not anticipated was the concern of the market that next player in the EuroTribe, Italy, might default on their debt. Overall, we started low, buy by the end of the day had made significant gains with the DOW having risen .71%. Here is the return on the individual stock picks.

FDO (Family Dollar)              lost        .08%
DLTR (Dollar Tree)                lost        .56%
CATM (Cardtronics ATMs)   gained  1.08%
                                                               .44%    Total Gain

As of today, I have gained a total of .44% in the overall stock porfolio.

Over the coming week, we will revisit this initial investment. Key to your success in the market is limiting your losses. This means that when you buy a stock, you also determine the amount you are willing to loose. It my case, I have chosen a 6% stop-sell. If the stocks continue to grow, I will move my stop-sell behind the closing price.

I have said that it is not the opinons of analysts or politicians that determine the trend of the market. The market is the sole determinate of its price. Markets are irrational and humans are poor at determining what the market will do.

One of the top market gurus, has been right only 60% of the time. Most are right about the market only 30% of the time. This "human error" is one of the reasons for a BUY and HOLD philsophy.  Timing the market is a very poor method for investment.

Active portfolio management is not "timing the market" nor "day trading". Active portfolio management is OBSERVING, IDENTIFYING TRENDING STOCKS or BONDS, then BUYING, and SELLING both bonds and stocks when a clear trend changes. The purchase of STOCKS or BONDS is based upon strict rules for the purchase and sell of equities. When the rules are followed, the opportunities for success is enhanced.

(note: The above article is soley for entertainment purposes and not to be used as financial advice under any circumstances.)




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Today's Market
by Dr Invest



Friday, at the close of the market, I purchased three stocks. CATM, FDO, DLTR which are Cardtronics ATMs, Family Dollar Store, and Dollar Tree Stores. The real question here is: Why?

The market is indeed irrational. All the surrounding facts would compel a person to move all his investments to CASH. Yet, here I am, buying into the market. Quite honestly, the market doesn't care what I think. The market is the market, it moves up and it moves down. So my purchase of stocks can't be based upon what someone said about the national debt or a rise in commodities. These gurus will sell you their StockReports for a mere $250 per month, but they will likely be the only ones to profit from their advice because they have your subscription. The best gurus are only right about 63% of the time and the average stock guru is right only a little over 30% of the time. In the stock market, the market is right 100% of the time. It is the market that determines the value of the stock.

So, here's my interpretation of the market. Reports have shown that during this Christmas season, the dollar stores will dominate. With a number of negative factors that would normally influence the market to decline, it has only continued an upward trend. In October, the market climbed more than all the other months combined. I call this "kinetic energy" waiting to be released in a seasonal bull market. Others may call this buying pressure or market momentum, but the market is showing signs it wants to move higher. The recent reports of companies profits is a postive sign for an uptrend. Finally, we are in what is commonly called, "The earning season". I look closely at seasonal trends and when the stocks are most likely to rise. (October to January)

Finding an Entry Point

The real challenge is finding an entry point when the market is advancing so forcefully. Friday closed with great turmoil over whether the Prime Minister of Greece could lead his government into the Eurotribe's bailout plan. You will remember that the same Prime Minister said, "I need to call for a referendum vote by the Greek people." After the G-20 summit, he quickly reversed himself, calling for the Greek representatives to move forward on the Euro Bailout Plan.

A casual observer could see that something happened at the G-20 summit, that convinced the Prime Minister that the Euro Bailout Plan was an imperative. The market was nervous on Friday that the Prime Minister of Greece, would not be able to put together a coalition to accept the EuroPlan.

So at the close of the market on Friday, I began to see the market decline the last thirty minutes of the trading day. THIS WAS THE PERFECT ENTRY POINT. After making my stock purchases, I could see the market rising the last 5 minutes of the trading day, along with my purchased stocks.

Taking a Calculated Risk

The only thing that was still lacking was the good news that Greece has approved the EuroPlan. Even with the approval, it does not guarantee that the market will rise, but it does improve the chance that the markets will not be shaken during this "earning season".

Here's the news report for Sunday evening:
           Elena Becatoros and Demetris Nellas, Associated Press, On Sunday November 6, 2011, 6:48 pm EST

ATHENS, Greece (AP) -- Greece's embattled prime minister and main opposition leader agreed Sunday to form an interim government to ensure the country's new European debt deal, capping a week of political turmoil that saw Greece face a catastrophic default that threatened its euro membership and roiled international markets.

This is really all that I need to see. My chances for the overall market to continue in an uptrend is greatly improved. I think that my selected stocks will also continue in an uptrend. What is important to me, is that I feel good about the investment. Questions remain about whether Greece can implement the austerity programs needed to satisfy the EuroPlan. Monday, the market will interpret how it sees the news out of Greece, but the EuroPlan will likely satisfy the markets until February of 2012.

Protecting the Investment

I will repeat this mantra again, and again. When you buy a stock, put a stop-sell on that stock. My suggestion is to set your loss at 6 to 8% depending on the volatility of the stock. You potential loss is only 6 to 8%, but if the stock continues on an uptrend, you move your stop-sell behind the closing price. The goal is to pay for your trading fees and see a return on your investment. Don't sneeze at a 2% gain after trading fees, that is better than what you would get at a bank.

Should your stock slow in the force of its uptrend or begin to move sideways (consolidation), move the stop-sell as close as possible to the closing price without tripping the stop-sell. Any radical drop in the price of your stock will trigger your stop-sell.

Calculations

DLTR (Dollar Tree) was purchased for $79.20 per share. Multiply 7920 *.06 = 475.2  (6% of $79.20 is $4.75.) I now subtract 4.74 - 79.20 = 74.46 remains. (My stop-sell is placed at $74.46)

I chose DLTR because I believe it will advance, not decline in value. But if I am wrong, I won't need to make a decision to sell, because I already have made that decision. If I am right in my judgment, I will advance the stop-sell 6% behind the closing price until the stock rises high enough to produce a gain in the investment.

(Note: The above information is soley for entertainment purposes only and should not be considered under any circumstances as investment advice.)

 

Today's Market
by Dr Invest



 Just when it seems the dollar is under water, up it pops, then settles once again. The stockmarket is following a similar trend. After the EuroTribe's agreement in saving Greece, the markets popped. No one doubted the future for stocks was only a bright one.

In previous blogs, I pointed out that even if the EuroTribe made an agreement, they would still need to pass muster with their own political systems. In this case, I was right! When the Prime Minister of Greece declared his intent to put the EuroTribe's plan to a vote in Greece, the stock market plunged. 

True to form, we are having a seasonal rally. We did not entirely loose the gains from October. Even in the face of bad new from Bernanke today, the market continued to rally. The pressure to make investment gains, have over ridden the reasonable caution needed to reduce losses.

Keep Your Hand On The Switch

If you are in the market you need to determine how much you want to loose, then put a stop-sell on your stock. If you want to buy stock, determine how much you want to loose and put a stop-sell on the stock. If your stock continues to rise, follow your profits with a trailing stop. Don't even blink!

Stocks to watch are PETM, CATM, and DLTR. But you are responsible for selling these immediately if there is a down-turn. And this can happen in moments, not hours.

Recently, one of my favorite analysts, Louise Yamada, pointed to some bearish technicals pointing to a market decline. Lousie is too old to play games and reflects the truth. She, admittedly, suggested that the market could turn upward the remainer of 2011, but warns, "Be Cautious!".  She also sees that BONDS COULD TURN BEARISH.

I am invested in TIP and BND, two ETF bond funds. Eventhough they performed poorly through the summer, BND has returned around 6% for the year and TIP, around 9% for the year. Just as a balance to stocks, the ETFs are easy to buy and easy to sell. With the advice offer by Louise Yamada, I will put stop sells on the bond funds as well.

http://www.financialsense.com/financial-sense-newshour/big-picture/2011/10/29/01/ryan-puplava-louise-yamada/stay-defensive-for-now-new-bear-market-in-bonds

Click on the link above and read her report.

The Remainder of the Week

We have the EuroTribe meeting yet again with the big 20. I doubt that anything will be hammered out, but the market is forward looking, hoping for some new reason to invest. I believe that the market will continue to advance until 2012, but I would protect myself against any losses.

The market needs to settle a few days and show that it will continue to grow... who knows, maybe I will buy on Monday, but for today? I don't think so.

(Note: the above article is soley for entertainmen and not to be used for any kind of investment decisions)