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.)