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Stocks & Mutual Fund Information
Dispelling Illusions of the Stock Market
How can you dispel an illusion unless you look directly at it? The magician distracts the eye with one hand while he does his manipulation with the other. You are looking in the wrong place and not seeing what is actually happening.
Diversification
Wall Street's watchword has always been diversification, but what does it mean and why do they say it?
Dividends
When is a dividend not a dividend?
Does Japan Matter?
For the last 12 years we have seen the Japanese stock market slowly sinking from a high of 38,000 to about 8,000, more than a 75% loss and very close to the price of the Dow Jones Industrial Average. Why should we care about their stock market?
Dollar Cost Averaging
Dollar cost averaging is one of the most popular ideas in the investment community. Everyone seems to like it and it has become a watchword among stock and mutual fund brokers. If it is properly done you will make money, if not you will lose money or at best stay even. Let's examine the basic premise behind this method of investing.
Dont Ask Your Broker
Unfortunately, most of you who are reading my column are suffering some substantial losses in the stock market. Whether it is mutual funds or individual stocks everything with mighty few exceptions is going down. Maybe you are just giving back some nice profits, but maybe it is beginning to bite into your original principal.
Dont Fight The Fed
One of the great truisms of Wall Street is "Don't fight the Fed". For the long term investors this has resulted in greater profits. When the Federal Reserve Board hikes interest rates look out and when the do it 3 times in a row it is called "3 jumps and a stumble". We have just gone through the stumble and it has been costly.
Downdraft
For the year 2000 we have seen hundreds of mutual funds lose 40%, 50% and more of their value. This does not seem right since the fund is supposed to be managed by a professional. How can this "professional" do such a bad job? More than half of the funds this year will not out perform the S&P500 index which closed down about 10%.
Duck
Duck! No I don't mean a quack, quack. I meant get down, look out for a huge blob of brown stuff is heading your way.
Duct Tape
Did you run out to buy that duct tape yet? Don't forget the plastic sheeting, bottles of water, canned food and a couple of books to read. What are you waiting for? I know - things to get better so you can resume your normal life style.
Getting Even
I know there are a lot of you out there who would like to "get even" with the stock market. Many are on the diet of "I hope, I hope". As a professional trader I can tell you that diet will make you very sick.
Good News?
As the man said, "I've got some good news and I've got some bad news. What do you want to hear first?" It was replied, "Tell me the good news first". The good news is that they are going to make some changes in the mutual fund industry reporting to help the investor and the bad news is it isn't going to make any difference in your bottom line.
Hedge Funds
You read and hear a lot about hedge funds. Unfortunately, most of what you hear is negative because it comes from the major media that has an interest in reporting negatives about them because the major media is supported by so-called standard mutual funds and brokerage companies that spend big bucks for
advertising. Hedge funds are NOT allowed to advertise.
The Holy Grail (of Investment)
Every year I go to the Money Show in Orlando, Florida. Thousands attend. It is mostly an older crowd with the youngsters about 40 years of age. I have been saying for years that until you have lost enough money trying to make a fortune you will not become serious about investing. The under 40's are shooting for the moon and it has finally dawned on the over 40's (maybe it's the over 50's) that they must find a better way to get rich.
Gold Fever
Right now there doesn't seem to be any "gold fever". Very few are out looking to strike it rich in this sector.
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The debate rages all over Eastern and Central Europe, in countries in transition as well as in Western Europe. It raged in Britain during the 80s: Is privatization really the robbery in disguise of state assets by a select few, cronies of the political regime? Margaret Thatcher was accuse of it - and so was the Agency of Transformation in the Republic of Macedonia. At what price should the companies owned by the State have been sold? This question is not as simple and straight forward as it sounds.
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I Love You, Warren Buffet
Sometime around 1980, can't remember exactly, there was a flight of money from many countries to Switzerland. The clock makers had so much money pouring in that the banks took interest rates to zero and even for a period of time were actually making you pay ½% interest to them to put your money in their banks. Yes, it actually happened because people believed their money was going to be safe there. It was.
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Frog In The Pot
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Successful Trading ? Taking Profits - Part 2
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Nest Eggs and Omelets
Do you have a nest egg? You know, a place you are stashing away money for the future - retirement, down payment on a house, the kids education. That kind of thing. How're you doing?
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Analyzing growth stocks is an important focus for any investor. This is especially important, since stocks are an irreplaceable part of any good investment plan, and since unbiased stock research is hard to find. Still, we need to look at the big picture once in a while. Since so much has changed lately, this may be a good time to "take stock". Many have reevaluated their investment strategies. The problem is that many of these reevaluations are moving people away from their goals. As the market has dropped, rather than moving toward buying at the cheaper prices, we've seen people move away from stocks, a strategy which has little long-term benefit.
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