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.

You are wondering what should I do? I know, I'll call my broker. He knows all about the market. Please! Don't ask your broker. I already know what he will tell you. The usual Wall Street smoke and mirrors answer. "Don't worry. This is just a healthy correction in a bull market. It will come back". It makes me sick to hear this kind of nonsense from a supposedly informed and intelligent (?) person. By the way, what is "healthy" about a 38% "correction"?

If this guy was so smart when he had you buy these stocks and mutual funds then why wasn't he smart enough to have you sell before you gave back 50% or more of your portfolio? He is working under the guise of investment conventional wisdom that is conventional but not wisdom. "Mr. Mushroom, you are in for the long term so don't worry about these aberrations." YUK! That is what you are - a mushroom. Grown in the dark and fed you-know-what.

There are times when you should have on only one position - CASH. Cash is a position, but brokers are not taught that. They never heard of it.

When I was a floor trader guys would come to me and say, "Al, what do you have on?" and my reply, "Nothing" drew a shocked look. "How can you be down here on the floor and not be trading?" It is very simple, I was there to make money, not to trade. Many times you should not be doing anything. It is the same for the average investor. He should be in cash when there is a bear market as there is right now. How long it will last I don't know, but I will know when it is over and the bull has returned. Your broker won't know because he has not been trained to make money, only to make commission.

Every stock and mutual fund you own should be examined regularly (preferably weekly) and a stop placed under each position so (just in case) that hummer decides to tank you will be out with your profit. Never let a winning trade go to a loss. You must protect your capital at all times.

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.

Copyright 2005

[email protected]; 1-888-345-7870

In The News:

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AppleInsider

Big mutual funds loaded up on AAPL in Q3, some now worrying about growth
AppleInsider
Even smaller funds got in the act. Coatue Management grew its Apple stock holdings to over 884,000 shares, and Tiger Global Management now has over one million shares. Warren Buffett's Berkshire Hathaway increased its position in Apple by 522,802 ...

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Investorplace.com

5 Vanguard Mutual Funds to Depend On
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Risk-averse investors should note that VIHAX devotes just over 20% of its weight to emerging markets stocks, so this may not be suitable for extremely conservative investors looking for mutual funds to buy. However, eight of this Vanguard fund's top 10 ...


Zacks.com

Consider These 3 Mutual Funds From the JP Morgan Portfolio
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These are companies with market capitalization equivalent to those listed on the Russell 2000 Growth Index stocks and below $4 billion at the time of purchase. The fund seeks capital appreciation for the long run. JPMorgan Small Cap Growth Fund A has ...

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U.S. News & World Report

How to Find Gender Equality Mutual Funds and ETFs
U.S. News & World Report
Or, if you don't know what you're looking for, you can filter by fund categories, families and types, and if it's diversified or labeled as socially responsible. You can also compare major fund managers to see how their mutual funds stack up on gender ...

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Nasdaq

Is Conestoga Small Cap Investors (CCASX) a Strong Mutual Fund Pick Right Now?
Nasdaq
CCASX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 ...

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Reuters

Dell sweetens VMware tracking stock offer with higher price, board seat
Reuters
Mutual fund BlackRock Inc also plans to back the deal, two people familiar with the matter said. BlackRock could not be reached for comment. “It will start to move forward at this new price of $120 a share. It seems many of the large holders are ...

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Business Insider

Investing titans Fidelity, Janus Henderson, and JPMorgan loaded up on Apple stock — then it tanked 15%
Business Insider
Mutual fund Fidelity added 7 million shares during the quarter ended in September, Reuters reported, bringing its total holdings to about 111 million shares. Philippe Laffont's Coatue Management raised its Apple exposure by a massive 938% to 884,321 ...

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CNBC

Buffett's big bank bet explained using a simple measure of stock market value
CNBC
As one example, the Invesco KBW Bank ETF (KBWB) provides strong exposure in a concentrated ETF to Buffett's banking stocks, according to Todd Rosenbluth, director of mutual fund and ETF research at CFRA. Bank of America, J.P. Morgan, US Bancorp, ...

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Barron's

Betting on Stock Size Isn't Working the Way It Once Did
Barron's
This is echoed by Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA, “Investors need to have both [large-caps and small-caps] in their portfolio, instead of having just one and sticking with it,” he explains. One way to avoid ...


Investor's Business Daily

John Boehner-Backed Pot Stock Goes Public With $2.8 Billion Value
Investor's Business Daily
The raise, he said, comprised the family offices and high-net-worth individuals that turned up in its earlier fundraising rounds with hedge funds and mutual funds. Canadian marijuana stocks sold off hard following the beginning of Canada's recreational ...

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