Have you noticed that whenever you talk with a financial planner they talk in terms of certainties. But when you sign the investment documents they point out that there are no guarantees the things they told us before may apply?

Do you go to a car showroom and hear them tell you all the great things about their cars but as you drive it out of the showroom do they make you sign a waiver and tell you the car may not work as stated. It may stop as soon as you leave the driveway, the doors may fall off, the engine may not reach the speeds they said it would. Read the rest of this entry »

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Wall Street is full of high sounding, feel good sayings about investing. Al Thomas of Mutual Fund Magic has put together what he calls The Wall Street Ten Commandments that he says will send you broke.

I suggest you get them framed and hang them on your wall. Then when ever you need to talk to your financial planner stand in front of them and recite them several times. That way you might just avoid falling under their spell when you talk to your financial wizard - er I mean adviser.

Wall Street’s Ten Commandments that will send you broke

1. Do Research
2. Buy and Hold
3. Dollar Cost Averaging
4. Diversify
5. Buy a good stock and put it away
6. You can’t afford to be out of the market
7. Never try to time the market Read the rest of this entry »

I thought I might try and see how Buy and Hold Non-Strategy held up against a Stop Loss Strategy from the 2000 stock market crash to now.

I know when I watched the market recover from the March lows I was tempted to put some money in the market. But I use stops and my stops would almost certainly have been hit. So I stayed out and will stay out until I get a clear signal to go back in.

Even then I will trade with my “play money” not my nest egg money. If I start to see my play money is not getting whipped out I may start to put a percentage of my nest egg money in the market.

Since I don’t do much chart analysis these days I went looking for something that fits with my beliefs about market timing and could give me an indicator that a Bull market might be happening. But more importantly that the high volatility has reduced so I don’t get whipped out with my stop losses.

Then I thought what if I could do a hypothetical comparison on Buy and Hold vs. using a Stop Loss Strategy over the period 2000 to now. Recent stock market history has more relevance to us Baby Boomers. Read the rest of this entry »