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.)