Invest, Be Wrong, and Make Money in the Stock Market

I have been trading for several decades and was an exchange member and floor trader for 17 years. You learn fast there or you go broke in a hurry. As you can see I managed to hold my own for a few years until I found the secret and started to become a successful trader. Every professional trader I know knows the one great secret and that is to keep your losses small.

We all learned that when we took a position ? either long or short ? that we better be able to jump out if the trade was not going our way. Many of my friends were scalpers. That means they were trading for just a few ticks and every night went home flat. Flat is no positions at all.

Others, myself included, took a longer look and planned to hold a position for a period of time. That could be several days or weeks. If you were right the longer you held on the more money you would make.

The general public seems think that exchange members know everything and always made money.Tain't so. Many traders were wrong more than 50% of the time. Huh? Yes, fifty percent. My account had losses 40% of the time and 20% were scratch trades (neither winners nor losers).

You ask, "If you are out of the money 60% of your trades how can you make money?" This is what every professional knows: Keep your losses small and let your profits run. How many times have you heard that one? BUT how many times have you ignored that rule?

At the end of the year when you analyze your trades you find that you made $3.00 for each $1.00 you lost you will show a nice big profit.

I don't care what business you are in you don't put your whole wad on a single outcome and stick with it until it either works or go broke. That is what brokers and mutual fund managers want you to do. They want you to buy, but never sell.

It is a tragedy for the small investor today that mutual fund families are putting in selling restrictions to discourage investors from dumping funds that are headed down. Many require long holding periods and if you sell prior to that time they charge an extra fee of 2%. They give lame excuses that I know are not true for doing this. Never buy any fund or trade with any brokerage company that has that kind of rule.

It is cheaper to pay the 2% or whatever fee there is and get out than hang around and lose 20% to 40% of your equity. Look back at 2000 to 2003. This can happen again despite what your broker tells you.

Be wrong and run home with most of your money. You still have enough to invest in a better opportunity. If you are disciplined to get out of any bad situation early you will end up a rich person.

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:

I would always recommend mutual funds over individual stocks: Anand Rathi  LivemintThe effort needed to manage individual stocks is much higher than the effort required for mutual funds.Anand Rathi talks about the ongoing economic slowdown ...
Mutual fund investors riding out market volatility through smart moves  LivemintMumbai: Retail flows into equity mutual funds have ebbed and flowed with the broad moves in the markets. Flows rose when the markets did well and fell when ...
What India’s top three mutual funds bought and sold last month  LivemintInflows into Indian equity mutual funds rose for the fourth straight month in August even as the nation's stocks suffered their worst three-month period since 2016.
Top 5 funds, managing Rs 12.53 lakh crore, shopped for these stocks in August  Moneycontrol.comInox Fluorochemicals, Sterling and Willson, Somany Home Innovation, JSW Holdings and Adani Enterprises among the top picks.
Actively or passively managed mutual funds: Which should you invest in?  Economic TimesAn ET Wealth study finds that most actively managed equity schemes have beaten their benchmarks.
These 9 mutual fund schemes have 0% loss rate across various time periods  Economic TimesDurable funds witness very few instances of negative returns across different time frames.
Top 5 fund houses, managing Rs 12.53 lakh crore, shopped for these stocks in August  Moneycontrol.comInox Fluorochemicals, Sterling and Willson, Somany Home Innovation, JSW Holdings and Adani Enterprises among the top picks.
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Mutual Fund Update: Stocks that attracted fund managers in August  Dalal Street Investment JournalIf we look at the July 2019 data, then we find that financials sector was the top sector to mark highest buying by the fund managers. Even in the month of August ...
Should you invest in small cap mutual funds now?  Economic TimesMany wealth advisors believe that investors could go for a staggered investment in small cap mutual funds.
RIL, DMart, Britannia top mutual funds' shopping list in August  Economic TimesIn August, fund managers of the top 10 fund houses by assets under management adopted the time-tested bottom-up approach in selecting stocks.
Family finance: How salaried Suresh should invest to achieve his money goals  Economic TimesSuresh K. is a software programmer from Hyderabad, who gets a monthly salary of Rs 1.76 lakh. He plans to get married by the end of the year and wants to start ...
If you are wondering which stocks to buy, top fund house offers cues  Economic TimesHDFC Asset Management, India's largest money manager by assets, was busy buying select banks, PSU and infrastructure stocks all through August, even as ...
Top 10 mutual fund picks that withstood market mayhem to cushion fall in returns  Economic TimesWhen 80 per cent of the stocks in the domestic market have seen wealth erosion in the ongoing selloff, even the seasoned money manager has not remained ...
Why you should invest in multi cap mutual funds  Economic TimesMany advisors are recommending multi cap funds in the current environment to investors. This scheme which bundles large-, mid- and small cap stocks is often ...
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What mutual fund managers are doing in the current market?  Economic TimesThese are trying times for the mutual fund managers. A bleak economic scenario coupled with countess stark data points have severely impaired the sentiment ...
Slowdown shock: PPF beats mutual funds over 5 years  LivemintThe economic slowdown, which has been gathering pace since the start of 2018, has now come to bite mutual fund returns. Key equity mutual fund categories ...
Top stocks mutual funds bought and sold in August 2019  CNBCTV18Domestic mutual funds remained net buyers for a fourth straight month, resulting in an overall inflow of Rs 1.02 lakh crore in August, much higher than Rs 87000 ...
Best small and mid cap mutual fund managers 2019  Economic TimesHere are the top 5 fund managers in the small and mid cap category who have created the most wealth for investors.
Top 30 stocks that fund managers bought & sold in July; do you own any?  MoneycontrolMutual funds net bought Rs 14,846.75 crore worth of shares last month. Their inflows into equity funds also improved to Rs 8,113 crore in July, rising nearly 6 ...
Diversify your portfolio by investing a portion in US-focused mutual funds  MoneycontrolDeveloped markets such as US have delivered significant returns over market cycles.
Mutual Fund Update: Stocks sold by fund managers in July 2019  Dalal Street Investment JournalIn our last update we listed the top 5 stocks that attracted fund managers in the month of July 2019. Now let's have a look at top 5 stocks that witnessed a lot of ...
Smart investing: 40 PMSes across large, mid & multicap outperformed Nifty in August  Moneycontrol.comInvesting can help you achieve your goals and smart investing can help ride through tough waters. Not entirely convinced with the statement? Well, data ...
ET Markets Special Podcast: How will market react to FM economic booster come Monday?  Economic TimesHi, this is Saloni Goel and you have tuned into ETMarkets' Special Podacast. Equity investing may look easy when stocks are down in the dumps, but separating ...
Heads up! Time to get into small & midcaps; 10 stocks looking attractive for long term  Moneycontrol.comIt is time to take note of small and midcap stocks, as most experts say the valuations are looking attractive and the froth in the broader markets seems to have ...
When equity mutual funds offer negative returns, here’s what you do  Economic TimesThe need of the hour is to stay insulated from the panic in the market.
Stock market crash? No Problem: Here are 4 steps to embrace it with a 'bear' hug  MoneycontrolThe stock market crash is the best excuse you can use to rebalance your portfolio. Getting rid of the non-performing investments and realigning your portfolio.
Franklin India Feeder - Franklin US Opportunities Fund: A good avenue for exposure to US stocks  BusinessLineGeographical diversification and unique opportunities bolster case for investing.
Stock market investor? Here are a few tips for making timely exit  Business StandardIn the Mahabharata, Abhimanyu, son of Arjun, knew how to enter the chakravyuha but was not aware of how to exit it. This cost him his life. Many stock market ...
Growth Stocks: How This Hot Mutual Fund Seeks Winners, Avoids Also-Rans  Investor's Business DailyJanus Henderson Forty Fund is a bottom-up investor in growth stocks. But it can't ignore macro risks like a technology cold war between the U.S. and China.
45% equity mutual fund schemes underperform their benchmark in five years  Economic Times45 per cent of the total 228 actively managed equity mutual fund schemes underperformed their respective benchmarks in the five-year period.
Direct plans of MFs: Only for the aware and systematic investor  Moneycontrol.comYou need to align your investments with your goals, as otherwise the intended financial target may not be achieved.
Five things to keep in mind before choosing an ELSS  LivemintIf you have just filed your tax returns, then the resolve to do better this year to make the most of the opportunities available to save taxes must still be *fresh* in your ...
Planning to invest in small cap funds? Spread your risk via SIPs  Economic TimesWealth managers are advising investors keen on looking at battered small cap shares to start systemic investment plans (SIP) in schemes that bet on these ...
Equity mutual fund managers buy the dip amid a huge downturn in market  Business StandardDomestic money managers lapped up shares of several companies amid a huge downturn in the market last month. Equity mutual funds (MFs) bought shares ...
Mutual Fund Update: Stocks that attracted fund managers in July 2019  Dalal Street Investment JournalIf we look at the June 2019 data, we find that the financial sector was the one that was on top of the buying done by the fund managers. Even in the month of July ...
Mutual funds see inflow of Rs 1.02 lakh crore in Aug  Economic TimesNew Delhi: Mutual funds' asset base increased to Rs 25.47 lakh crore in August, a rise of 4 per cent as compared with the preceding month, on the back of ...
Mutual funds add around 5 lakh folios in August, tally reaches 8.53 crore  Economic TimesIn comparison, the industry had added 10.29 lakh new folios in July.
Mutual Fund Investment: 5 reasons to invest in tax saving mutual funds  The Financial ExpressWhile there are various tax-saving investment options such as NPS, NSC and PPF, among others, tax-saving mutual funds have remained the most preferred.
Sundaram Mutual Fund garners Rs 358 crore via equity fund NFO  Moneycontrol.comSundaram Mutual Fund has collected Rs 358 crore from 30,932 investors through the launch of Sundaram Equity Fund, according to a press release from the ...
How retail investors tripped up on Yes Bank – Zerodha CEO releases data in blog post  LivemintZerodha CEO said 2 lakh people out of the 7 lakh who have demat accounts with Zerodha, hold Yes Bank stock and his clients are collectively sitting on an ...
These two key portfolio diversification strategies can help you buffer stock market risk  MarketWatchStories resonating with MarketWatch readers this past week.
Motilal Oswal NFOs may suit investors keen on passive mutual funds  Economic TimesInvestors looking to include low-cost passive mutual fund schemes in their portfolio could consider the new fund offerings (NFOs) of Motilal Oswal Asset ...
Big relief for stock market, equity mutual fund investors; Enhanced surcharge withdrawn  The Financial ExpressThe FM has announced relief from the enhanced surcharge on the long term and short-term capital gains arising in the stock market transactions.
L’Affaire CG Power a pain point for Yes Bank and mutual funds  Economic TimesSome of Indias biggest mutual funds hold substantial stakes in Gautam Thapars CG Power.
Resilient U.S. Growth Propels Stocks as Trade Fears Ease  The Wall Street JournalInvestors are piling back into stocks and unwinding massive bets on haven assets, illustrating renewed faith that a resilient U.S. consumer can continue ...
Sebi wants MFs to invest only in listed securities  Economic TimesSebi said it has also decided to give flexibility to MFs to invest in unlisted NCDs up to a maximum of 10% of the debt portfolio of the scheme.
Sebi allows mutual funds to tie up with banks to rejig exposure  Economic TimesMumbai: Mutual Fund (MF) houses can now join hands with banks to rejig exposure and throw lifeline to stressed corporates --- albeit with a few conditions.
Mutual Fund Trend: Infosys, REC and UPL among most sold stocks by MFs in July  Zee BusinessMutual Fund Report: Domestic equity mutual fund inflows continue to show resilience despite market volatility, with July inflows touching Rs 73 billion – a 9M ...
How to calculate weighted average returns using MS Excel  Economic TimesA combination of MS Excel functions proves effective when diverse amounts are invested across options.
9 steps to protect your finances against recession in the economy  Economic TimesBad news is infectious. As reports of job losses, slowing demand and the liquidity crisis trickled in last week, the stock markets slipped. To be sure, the Nifty has ...
How much money can I make in mutual funds?  Business Insider IndiaA large number of investors are investing in mutual funds to grow their money. As is the case with any investment instrument, your money can yield very high.
CNBC-TV18's top stocks to watch out for on September 16  CNBCTV18Indian shares are likely to open lower on Monday, tracking muted Asia, as weekend drone attacks on Saudi Arabia's oil production facilities are likely to weigh ...
Yes, Passive Investing Has Exploded. But Here’s Why Fears of a Bubble are Overblown  FortuneConcerns are growing that passive investing is dangerous for the global markets. Here's why you shouldn't change up your investment strategy.
Motilal Oswal AMC launches four index funds  Economic TimesMotilal Oswal Asset Management Company on Monday launched four index (passive) funds. The four schemes are: Motilal Oswal Midcap 150 Index Fund
Buy these 15 handpicked stocks for 11-44% return in next one year  MoneycontrolNifty corrected more than 1,000 points in the last two-and-half-months from its record high, dented by the economic slowdown, liquidity crisis, dismal earnings ...
CNBCTV18's Market LIVE: Sensex, Nifty trade lower as financials, OMCs drag, consumer, pharma shares support  CNBCTV18Market LIVE: Stocks in India, the world's third-biggest importer of oil, slumped on Monday as oil prices surged after attacks on key oil producer Saudi Arabia's ...
CNBC-TV18 Market Highlights: Sensex ends 281 points higher, Nifty above 11,050; OMCs gain, BPCL up 6%  CNBCTV18Indian shares ended higher on Friday, tracking gains in Asian peers, led by oil & gas, banking and auto stocks. The Sensex ended 281 points higher at 37385, ...
Stocks To Invest In: Hot Wasatch Manager Seeks Volatility-Resistant Stocks  Investor's Business DailyThe stock market's rollercoaster ride in August made it challenging for even the best mutual funds to find stocks to invest in.
Weekly Wrap: Defensive Funds, Rating Updates, and How Much You Need to Retire  Morningstar.comWe recap the week on Morningstar.com and note the most popular stocks, funds, and ETFs.
Mutual fund investors keep faith in stocks despite market rout  LivemintMumbai: Investors in Indian equity mutual funds bought more last month, unfazed by the selloff that saw the nation's $1.9 trillion market log its worst July in 17 ...
How to prepare for a recession  CNBCAre you prepared if a recession hits? Whether or not one is on the horizon, you should take some steps ahead of time to recession-proof your life. “Now is the ...
What India's biggest mutual funds bought and sold in July  LivemintInvestors in Indian equity mutual funds bought more last month, unfazed by the selloff that saw the nation's $1.9 trillion market log its worst July in 17 years.
Goldman Sachs Finds 5 Top Stocks Mutual Funds Have Loaded Up On  24/7 Wall St.To say that mutual fund portfolio managers tend to follow the herd is an incredible understatement, and it always has been. While publicly they sometimes seem ...
Walmart Stock, Lululemon Stock Lead 5 Retail Stocks Near Buy Points  Investor's Business DailyDow Jones giant Walmart's stock and Lululemon stock are in buy zones, while TJX stock, eBay stock and Zumiez stock are just below buys as retail stocks lead.
Is it time to stop investing in equity mutual fund schemes?  Economic TimesIt is difficult to predict the market but many pundits feel it clearly needs some firm signal from the govt.
Why picking the right mutual fund is key in a tough market  LivemintWhy have mutual fund (MF) returns fallen? Mutual funds primarily invest in equity (stocks) or debt (bonds). On the equity side, mid and small cap MFs have given ...
MF shopping list: Top 30 stocks that fund managers bought & sold in June  MoneycontrolMutual funds increased allocation to private banks, consumer, utilities, technology, NBFCs, retail, metals and PSU bank stocks in June, an ICICIdirect report said.
Invest in reliable outperforming mutual funds: Here are 8 of these  Economic TimesThese funds tend to score well on risk-adjusted metrics and hold dependable stocks in their portfolios.
Should you invest in international mutual funds?  LivemintIf you were to sort all equity mutual funds available for retail investment by their one-year performance, international funds would come on top. The best ...
Retirement Planning That Protects Your $1 Million Savings  Investor's Business DailyYour retirement planning has paid off. You've saved $1 million. Now you're wondering how long $1 million will last in retirement.
Consider investing in direct stocks only if you can monitor portfolio proactively  LivemintDirect stocks can be considered if you have the ability to do research to identify the stocks to be bought as well as to be sold.You should be revisiting your ...
Is it time to switch to index mutual funds?  Economic TimesBy Rishabh Parakh It is one of the hottest topics debated these days: is it time for mutual fund investors to switch to passively-managed index funds from their ...
Mutual funds’ exposure to this space at all-time high; should you buy?  Economic TimesMoney managers on Dalal Street continued to shower affection on private banks for the ninth successive month as their exposure hit 19.90 per cent in June, ...
What India's three largest mutual funds bought and sold in June  LivemintInflows into Indian equity mutual funds jumped the most in three months in June.India's top money manager HDFC Mutual Fund held $22 billion in equities.
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
Sensex's rise from 20K to 40K: 5 lessons for equity mutual fund investors  Economic TimesWe look at some critical lessons that equity fund investors learnt during the journey of Sensex reaching 40K.
Best mutual funds to invest for 10 to 15 years  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
Here are a few mutual funds that stocked up on YES Bank in Q4FY19  Business StandardShares of YES Bank tanked 30 per cent in trade on Tuesday, after the bank reported a massive Rs 1,507 crore loss in the fourth quarter of financial year 2018-19 ...
Mutual fund investors showing great appetite for assuming risk: Dhirendra Kumar  Economic TimesOne would have thought that new investors who came into mutual funds will be running away. But they are getting into riskier category of funds and the scale of ...
Actively-managed large cap mutual funds poised for a comeback  Economic TimesDefying predictions of their imminent irrelevance, some actively-managed large cap mutual fund schemes have bounced back to the top of the return chart.
Equity mutual funds are offering negative returns. What should investors do?  Economic TimesAll equity mutual fund categories have been offering negative average returns in the last one year. Small cap and mid cap schemes were hit the most, with ...
Flows into mutual funds revive in May as Modi win seems to spur risk demand  LivemintFlows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
Value mutual funds have given good returns over long term but can underperform in short term  Economic TimesOver the years, the benefits of value investing have been espoused by several market gurus and fund managers. Discussions around this investing philosophy ...
What India's top three mutual funds bought and sold in May  LivemintInflows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
Mutual fund SIPs don't make equity investing risk-free. Here's why  Economic TimesSIPs do reduce the risk of market timing & allow investors to buy more units when their price falls.
A young investor’s guide to mutual funds  Economic TimesMany young investors, who are barely a year or two old in their career, are eager to start investing in mutual funds. ETMutualFunds.com receive many queries on ...
6 bad money habits that investors should give up  Economic TimesSome habits can exact a heavy toll on your finances. We look at a few common ones that you should give up.
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
Index mutual funds see 60% jump in assets in a year as actively managed funds struggle  Economic TimesIndex mutual funds — a category that aims to mimic returns of benchmarks, like Nifty or Sensex — have seen their assets surge 60% over the past one year as ...
How concentrated is your mutual fund portfolio?  LivemintA concentrated portfolio can backfire badly if the fund manager's strategy goes wrong.A portfolio with few stocks can fall sharply if share prices of most stocks in ...
Should investors with very long term horizon always pick small cap mutual funds?  Economic TimesMutual fund investors assume that their risk taking ability goes up if they have really long investment horizon.
These 24 mutual fund schemes have consistently given over 20 per cent returns  Economic TimesMutual fund managers and advisors always ask investors to choose schemes with a consistent performance record. The point is your scheme is supposed to ...
Stay away from stock tips  LivemintIf taming the stock market was easy, everyone would do it.Losing money in market is real and facing volatility is part of the deal.
Mutual funds bet big on these 30 stocks in November; do you own any?  Moneycontrol.comThe Indian equity market rose about 5 percent in November but what was more heartening to see was inflows into mutual funds. Investors pumped Rs 1.4 lakh ...
Should you invest in algorithm-based quant mutual funds?  Economic TimesQuant funds work on a data-driven model that relies on a mix of parameters and algorithms to identify the right stocks at the right time. But can they beat actively ...

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