Tuesday, June 30, 2009
It ran smack into that average in the first hour of trade and reversed downward.
You'll see the break below the 8/8 crossover average on the 15 and 30 minute charts when that happens, and that will be a decent entry into the DXD for an intra-day or longer - inverse Dow play. Today it added nearly a buck within an hour of that event.
Steve
Monday, June 29, 2009
http://www.usatoday.com/money/perfi/stocks/2009-06-28-buy-and-hold-stock-strategy-investing_N.htm |
Friday, June 19, 2009
An Interesting Take on Investing
"The first element of the strategy is to be forward-looking rather than backward-looking.
'That speaks to asset allocation and geographical exposures,' El-Erian said.
The second element is that the road forward will be mired with sharp turns and bumps. As a result, investors must position their portfolios to benefit from cyclical trends.
'That bumpiness constitutes an additional challenge for buy and holds, which is to make sure that people can in fact hold -- because when you have a very bumpy journey, there is a temptation to stop holding at the wrong time,' he said.
'So there has to be a much more responsive element of the portfolio that is looking to capture not long-term secular and structural trends, but looking to catch shorter-term cyclical and technical trends,' he said.
The third element of El-Erian's plan is conscious risk management, which gets at diversification. In the past, El-Erian said, one of the problems with the buy-and-hold strategy was that it encouraged people to think that diversification was sufficient for risk mitigation.
'That's no longer the case. Diversification is necessary, but it's not sufficient,' he said. It's necessary because it's the best method for mitigation of risk, but it's not sufficient because, as El-Erian points out, you can have years, such as last year, in which all the correlations go against you. Therefore, he said, buy and hold needs to be supplemented with much more responsive risk management.
'It's not enough to say I'm going to be able to buy and hold simply because I'm diversified. One has to go a few steps further and ask what does it look like when I'm actually buying and holding?' he said.
Building on that, El-Erian said a portfolio should be constructed such that only part of it is held for the 'long term,' which he defines 'long term' [sic] as three to five years, max -- because it's difficult to forecast what happens much beyond that."
Wednesday, June 17, 2009
Two Keys To Recovering Your Nest Egg
- 35% of those 45-54 have stopped putting money into retirments accounts
- 25% have withdrawn funds from their retirement accounts
- 56% have postponed major purchases
- 24% have postponed retirement plans
The boomers are going bust. Why? Because they thought they had little control over their retirement accounts, and what control they did have, they just didn't know what to do about it.
That's very disturbing to me, and part of the reason I do what I do.
Our Forecasts showed a decline ready to begin back in August of 2007. Long and intermediate cycles were ready to roll over. When that pattern develops, if you can't buy puts, or buy inverse ETF's which will actually make money when markets decline, THEN YOU MOVE TO CASH. Plain and simple, you get out of long or growth funds and move into money market or government securities.
Millions of investors needlessly gave up years of gains in a few short months because they relied on "advisors" to tell them what to do. Big mistake.
Those advisors, are for the most part, paid only by money under management. When you move to cash, it is no longer under management. Where then is their motivation? To keep you in funds. That seems criminal considering what has happened to peoples life savings in the last two years.
Retirement accounts could have been spared. Life savings should have been protected.
In a survey we conducted in April, 95% of our users made thousands (some hundreds of thousands) of dollars over the past twelve months. (I'm going to have to work harder on the other 5%). The only reason they did so, is because we showed them what to expect, and they took action.
If anyone is serious about making money, those are the two keys: learn how to read the markets (forget about individual stocks, all the fundamental information is just padded reporting anyway), because as the markets go, so goes your portfolio. And when you understand its behavior, do what's required, take action.
Anyone who just turns their money over to someone else, especially some advisor who doesn't or can't trade the markets both up and down, and has a track record supporting it, isn't worthy of your time, your trust, and definitely not your wallet. You will do better than ANY of them on your own, IF you will learn and apply those two keys.
Steve
Tuesday, June 16, 2009
Can't Wait for Wednesday
Steve Calls It
Monday, June 15, 2009
Friday, June 12, 2009
The Times They Are A Changin'
When the S&P 500 loses money over a 10-year timeframe, it's time to question old assumptions. A long-time advocate of buy-and-hold investing, The Motley Fool's Tom Gardner recently wrote:
"There's a seismic change in the market," says Will Hepburn, president of the National Association of Active Investment Managers. "The people who were buy-and-hold-oriented lost a lot of money, and they don't want to do it again."
Welcome from Steve
Technology marches on, and in an effort to keep pace with it (though no twitter yet - I do really trade, and prefer a non-digital life as well), and to keep everyone who may or may not yet be members of our website http://www.themarketforecast.com/ informed, I plan on posting some great stuff that may not fit perfectly into all that we provide on our member site.
We'll be joined here by Chuck Warner, a friend and new contributor who comes with a wealth of background and experience in the markets. He loves what we're doing and will make a great addition to our editorial team.
First, let me provide a link I use all the time. It adds some very important perspective into underlying market conditions that most investors never consider. Those who have been members on our site for some time, and those who have attended any of my seminars or webinars know this one well: http://stockcharts.com/symsearch/index.html?$
It is a very long list, but here are some of my favorites: $SPXA50R, $SPXHILO, $NYHL
As an example, here is the $SPXHILO showing how in both bull and bear, the number of new highs and lows channel up or down, and why when looking at the far right side of the graph (current), you might not be so quick to call the bear market over for 2009!
Note, we are only reaching the top of that downward channel right now, and once we have reached it again, a reversal could catch a lot of investors by surprise.
Best of trades,
Steve