Forecasting the Stock Market

Every day I see in the financial section of newspapers how to forecast what the market will do in 6 months, 12 months, several years. "Ten stocks that will double in the next 6 months." Right! I have trouble trying to forecast what it will do tomorrow. Do not trust any who claims he knows what the future will be for the market.

Of course, your broker will send you gobs of slick material about various companies that predict they will double or triple in the next 12 months. On the New York Stock Exchange there will be about one half of one per cent (0.5%) of companies that will double this year. Are you smart enough to pick those winners? I'm not and I am considered a professional trader. And I am sure your broker isn't either. He just wants to make a commission and is probably promoting a stock his brokerage company wants to push.

Every investor wants to know the future and will send money to some "expert" who will send him news about a company that only (?) he knows. And pigs can fly. One thing about the market. It is almost impossible to keep a secret and everyone knows everything about other companies. As soon as some "analyst" finds a cogent fact that can influence a stock price he will share that "secret" with a few close friends. Within minutes the "secret" is known by hundreds of thousands and is immediately reflected in the price of the stock.

If you do get sucked into one of these money traps by some smooth-talking salesman or newspaper verbiage I strongly suggest you immediately plan your exit strategy. Without an exit plan you can easily lose a large amount of your "investment". This is not an investment; it is a gamble and should be treated as such. The first thought of any professional trader is 'if I am wrong how much am I willing to lose'? Maybe 2%, 5%, certainly no more than 10%. Pros understand that small losses are OK, but never take a big loss.

From 1982 to 2000 it seemed everyone was a financial genius. How many of those folks kept those big winnings from 2000? Almost none. Most lost 40% to 60% of their money. Brokers said, "Hang in there. You are in for the long haul". Unfortunately he did not tell you that Modern Portfolio Theory is based on a 40 year time line.

Yes, but understand you don't need to predict anything. Don't forecast. What you can easily learn is follow the major trend. You bought in 1982 and you sold out in 2000. The trend can be found in many ways with the simplest being posted every day in Investors Business Daily newspaper under the IBD Mutual Fund Index. When the Index price is above the 200-day moving average you own equities and when it is below you are in cash or bonds. Nothing complicated,

Don't try to forecast the market. Let the market trend tell you.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

KSTP

Bring me the bleach: Investors seek stability as stocks fall
KSTP
After their years of eye-popping returns, those stocks had become some of the most popular to own among hedge funds, mutual funds and other investors. But just as they bought the stocks together on the way up, investors are now heading for the exits en ...

and more »

Benzinga

Best Technology Mutual Funds of 2019
Benzinga
A mutual fund is a collection of stocks handpicked by industry experts and sold as a type of prepackaged bundle. We've rounded up some of the best technology mutual funds currently available on the market—along with some tips to help you find the next ...

and more »

Economic Times

How your mutual funds played the balancing act during stocks crash
Economic Times
This suggests multicap funds are trying to capture opportunities across the market without going overboard on risk. Using the Sebi-defined cutoffs for market capitalisations and a look at allocations to each marketcap category across funds show mutual ...


USA TODAY

Can I sell a losing stock, deduct the losses and then buy it back?
USA TODAY
Generally, "substantially identical" means buying or selling the exact same stock. However, in the case of mutual funds or ETFs, it can mean buying another fund with virtually identical investments – such as selling one S&P 500 index fund and buying ...


CNBC

Goldman Sachs on 2019: Raise cash, get defensive and look out below if more tariffs happen
CNBC
Most investors (households, mutual funds, pension funds and foreign entities) are too overweight stocks and need to raise cash, Goldman said. "These entities have equity allocations ranking in the 89th percentile vs. the past 30 years," the report said ...
As the stock market and economy are set to skid, Goldman says cash will be kingMarketWatch
GOLDMAN: Cash looks competitive relative to stocks in 2019Yahoo Finance

all 106 news articles »

USA TODAY

As stocks skid, worries mount for 401(k) investors who can't 'stand the pain'
USA TODAY
Money starts to move out of stocks: While investors haven't exited the stock market in a stampede, more money has come out of U.S. stock mutual funds and exchange traded funds than has flowed in, Investment Company Institute data show. In the three ...

and more »

Morningstar Reports US Mutual Fund and ETF Asset Flows for October 2018
Markets Insider
20, 2018 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund (ETF) asset flows for October 2018. In October, investors placed $20.4 ...

and more »

These people have been buying up stocks faster than anyone since 1989
MarketWatch
One of the easiest and smartest ways to get started is with a mutual fund that contains a basket of investments instead of a single stock. If you have a workplace retirement plan, mutual funds are going to be the main item offered on the investment menu.


Investor's Business Daily

When Growth Stocks Do This, These Silver Linings Appear
Investor's Business Daily
Does this behavior on Wall Street reflect a hunger by fund managers to grab shares at a discount vs. recent highs? Quite possibly. Here's one piece of corroborating evidence to justify this conclusion: At the end of 2016, a total 364 mutual funds and ...


After Sour October, Fund Managers Gird For More Volatility, Trim Stocks
Investor's Business Daily
Ouch! That summarizes the shrinking performance by the stock market and U.S. diversified stock mutual funds in October. The stock market forecast? Fearing volatility ahead, money managers and strategists are flashing yellow warning signs about the ...

Google News

Patterns

The Law of Chaos is the theory of random unpredictable... Read More

Stock Trading Diversification

This is the continuing story of our two imaginary traders,... Read More

Stock Market Education; Day Trading for Beginnners; How to Pick Stocks

The trading method you employ to approach the stock market... Read More

E-mini Day Trading - Day Trading for Beginners - Stock Market Timing Software

I mean it when I say that. While plastic silverware... Read More

Tips to Finding Other People?s Simple Trading Plans

Did you know you can make money (and a lot... Read More

Trading For A Living

How many times have you said to yourself, "I'd like... Read More

The Stock Trading Plan - Why You Must Have One To Trade Successfully

This is the continuing story of our two imaginary traders,... Read More

Stock Analysis

I receive emails from Morningstar. This company provides statistics and... Read More

Robert Rodriguez Weathers the Stock Market

Robert Rodriguez likes to buy stocks at their lows. When... Read More

The Problem With Hedge Funds

Are hedge funds a suitable investment for you? Hedge funds... Read More

Is Active Trading The Answer?

One of the main reasons many of us get into... Read More

Investing Basics - Stocks, Mutual Funds, Real Estate & Online Investing

Have you ever thought of investing? Do you have a... Read More

Investing in Stocks and The Game of Monopoly

To begin, you might look at playing the stock market... Read More

Seecrets on Investment: Tired of Making Huge Losses in the Stock Market ? Part 2

Fundamental analysis.Fundamentals analysis says the best way to predict the... Read More

Mid-Cap Stocks: Asset Class with an Identity Crisis

Much like the middle child, mid-cap stocks have long struggled... Read More

Managing Investing and Stock Market Risks

Reduce your investing and stock market risks by:Setting your sights... Read More

Picking Mutual Funds to Outperform the Market

With over 6,000 mutual funds available, it may be tempting... Read More

Inverted Interest Rates

Inverted interest rates? What's that? Who cares? Even if you... Read More

Stock Market Volatility

In my opinion, due to the volatility of stock market... Read More

Eternal Sunshine

There is a current movie entitled "Eternal Sunshine of the... Read More

Dont Ask Your Broker

Unfortunately, most of you who are reading my column are... Read More

Where Is The Beef?

Where is the beef? Or maybe it should be where... Read More

Leverage - Margin Debt

What is leverage?Here is a definition of leverage from an... Read More

Dont Fight The Fed

One of the great truisms of Wall Street is "Don't... Read More

Stock Loans

Hedge current portfolio positions and gain access to capital resources... Read More