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.)