Trapeze Artist - Swinging with the Stock Market

When we go to the circus we see a trapeze artist working on a high wire or swing either alone or with other athletes. They know what they are doing because of constant practice, but every once in a while there can be a mistake, even a small one that can cause one of them to fall. The result is death or serious injury when they hit the ground.

When you look below them you will see a net. Thank goodness. No one wants to see them get hurt. As expert as they are they take precautions. In almost every profession or athletic event there is some kind of safety net available and this is true in the stock market for all investors. There is never any reason for investments to fall to the point the investor is hurt. Is there a net that breaks that fall and keeps the investor from losing all or part of his money? Yes there is.

It is called a Stop Loss Order. Brokers don't like them and never recommend them because it means he must watch your account and the average broker has too many customers to do that. However, you can instruct him to place an Open Stop Loss Order that means it is automatically in every day protecting your shares from loss. If you are not allowed to place this kind of order you should move your account to another brokerage house. They obviously don't care about protecting your money.

Let me give you an example. Suppose that last year you bought Cisco Systems (CSCO) at $50 per share. The first question to ask yourself is how much am I going to risk in case this stock goes down instead of up? You put up $5,000 and bought 100 shares. How much are you willing to risk? $500. $1,000. More? Well, today it is about $15 so if you did not have a loss protection you would be out $3,500 and that is too much. The Stop Loss Order is your Safety Net! If you don't have one you can be seriously hurt. One of the basic rules is never to lose more than 10%. Look at what you own to see if you would have more money today if you had placed a Stop Loss Order just below the highest closing price for your stocks. I know you would be money ahead.

There are literally thousands of stocks that have lost 80% and 90% of their value. For those poor people (pun intended) who did not have a safety net they are badly hurt and some are just about dead. Sorry, folks, it did not have to happen.

I don't care what you own. Now you should immediately look at everything in your portfolio and decide where you need to place those stops. If you don't put a net in place you could be hurt.

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

In The News:

When should you sell your mutual fund schemes? - Stocks and equity mutual funds are different  Economic TimesInvesting in an individual stock and equity mutual fund scheme is different. You must look at various parameters like key ratios while investing in a stock. Hence ...
Why HDFC Bank stock is among the top picks of mutual funds  Business TodayPrivate sector lender HDFC Bank, the third-largest Indian firm by market capitalisation, is among the favourite stocks in the portfolios of mutual funds. Despite ...
Individual Investments into Stocks, Bonds and Mutual Funds Drop; Interest in Alternative Investments Grows  PRNewswireOAK BROOK, Ill., Dec. 11, 2018 /PRNewswire/ -- High-net-worth investors have slowed their investments into stocks, bonds and mutual funds and instead are ...
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How your mutual funds played the balancing act during stocks crash  Economic TimesAs with market cap allocations, equity funds seem to be maintaining their sectoral exposures.
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Sebi in talks with industry on mutual funds norms  Economic TimesMUMBAI: India's market regulator is in talks with industry to deal with fears of contagion effect on mutual funds due to a liquidity crisis faced by the country's ...
How diversified should a mutual fund be?  LivemintThe extent of diversification is driven by the mutual fund's strategy and the market segment it invests in.
Mutual Funds For First Time Manage More Money In Stocks Than Insurers  BloombergQuintMutual funds for the first time manage more money in equities than insurers as the last stock rout erased the gap that started narrowing after demonetisation.
Kotak Mutual Fund is betting on these 5 sectors in 2019  Moneycontrol.comWhile current valuations are not cheap, the fund house expects a further pick-up in earnings.
See how they play market crash! MFs sold other stocks to lap up these 21 in October mayhem  Economic TimesPopular beaten-down stocks attracted big money from institutional investors on Dalal Street in October, when the domestic equity market was facing severe ...
Hot and Cold Stocks of Mutual Funds in October 2018  MoneylifeIn October 2018, Axis Bank and ICICI Bank were the most preferred stocks of Indian mutual funds. The net purchases of Axis Bank were Rs1,504 crore, of which ...
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Are smart beta mutual funds better than large-cap MFs?  Economic TimesSmart beta funds seeks to enhance returns from the base index by buying a larger proportion of stocks compared to their share in the underlying index.
Talking stock: Honeywell, YES Bank are good picks for long-term  Economic TimesBEL has been beaten down more than what it deserves due to negative perception.
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Stocks bleed as mutual funds lead sell-off  DAWN.comKARACHI: The outgoing week turned out worst weekly performance in 67 weeks as the market saw blood on the street on most trading days. The KSE-100 index ...
FIIs, MFs bet on 138 stocks in last 1 year; should you buy?  Moneycontrol.comOut of the 138 stocks which witnessed increase in weightage on a year-on-year basis, as many as 14 stocks saw a correction of 20-80 percent in the last 1 year.
Understanding, Benefiting from Mutual Funds  THISDAY NewspapersGoddy Egene writes on the benefits of investing in the capital market through mutual funds. The stock market is heading for negative close this year after a ...
Is your mutual fund portfolio really diversified?  Moneycontrol.comIf your portfolio consists of equity funds which have similar stock holdings, then it amounts to just duplication and may negate the positive effects of ...
YES Bank promoters prepay Rs 400 crore loans to Mutual Fund firms: Sources  Economic TimesYes Bank promoter companies today prepaid Rs 400 crore of non-convertible debentures (NCDs) held by two mutual funds. According to ET Now, the promoters ...
Sharp swings in Sensex: Here are 5 things you should avoid  Economic TimesThe Sensex dropped more than 500 points in the Tuesday morning trade but as the day progressed it climbed back up and again dropped. Some of the factors ...
Top 6 stocks where MFs, FIIs increased stakes in past 3 quarters  Moneycontrol.comSonata Software, JM Financial and Lumax Industries are some of the names that foreign institutional investors and mutual fund houses have incrementally ...
Fund managers' bets: Top 10 large, mid and small-cap stocks that MFs bought in October  Moneycontrol.comMF industry assets grew to Rs 22.2 lakh crore on the back of improved inflows into equity-oriented and liquid funds.
Why liquidity offered by mutual funds is good for you  Moneycontrol.comYou may come across emergencies which warrant sudden requirement of cash. In such a situation, mutual funds come in handy.
4 Best Fidelity Mutual Funds for December  Zacks.comThe prolonged market volatility calls for investments in stable mutual funds that can smoothly ride the turbulence in financial markets.
Stock Market Forecast: Dividend Stocks To Fight Volatility  Investor's Business DailyThe broad stock market gained 2.04% last month. Still, the stock market forecast by fund managers is for more volatility going forward.
Picking the best mutual fund: Are past returns relevant after re-categorisation?  Moneycontrol.comWhile selecting a scheme for investment or while deciding whether to continue with a current investment, a fund's performance track record does play a critical ...
Explained: What is an equity diversified fund and what makes it different?  LivemintAn equity diversified mutual fund is any equity fund which invests across different industries and sectors.
Week-Long Carnage in Bank Stocks Is Now Worst Slide of Trump Era  BloombergIt's tough all around the market, but in few places is the pain more pronounced than bank stocks.
Invest in stocks in run-up to 2019 general elections to profit from volatility: FundsIndia  LivemintInvesting five to six months before the elections in 2009 and 2014 earned an average 3% to 6% more than the Indian benchmark return in the five-year period to ...
U.S.-Stock Funds Seek Another ‘Up’ Year, but It Will Be Close  Wall Street JournalMonthly Monitor: An average total return of 1.7% for U.S.-stock mutual funds and exchange-traded funds in November puts the year-to-date rise at a paltry 1.6%.
Your all-stock 401(k) lost $10,117 thanks to the market's drop  USA TODAYMarket turbulence on Wall Street will show up in the form of losses on 401(k) account balances. The declines will be steeper for all-stock portfolios.
Buying frenzy: 10 stocks where foreign investors poured in maximum funds in Q2  Moneycontrol.comFPI increased stake by more than 1 percent in 30 companies out of BSE 200 including 10 stocks wherein they upped shareholding by 2.5-10.4 percent in ...
A New Wrinkle In The U.S.-China Trade Dispute  ForbesLast week global stocks plunged on concerns that trade negotiations between the U.S. and China are not running as smoothly as initially thought. The S&P 500 ...
Rising volatility is slowing outflows from stock pickers’ funds: Goldman Sachs  MarketWatchMutual fund outflows are on pace for their lowest rate since 2014.
The Mutual Fund Show: This Asset Manager Topped Crisil’s Ranking And How…  BloombergQuintBased on the performance of asset managers, Crisil ranked 462 funds as of September. Of this, 200 are equity funds, 214 are debt and 48 are hybrid.
Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over  WBURSounding the alarm on index funds. How their runaway success has reshaped power and accountability in boardrooms and on Wall Street.
Horses for courses: 2 mutual fund portfolios depending on your favourite for Lok Sabha polls  Moneycontrol.comYou could simply go ahead and invest in good quality funds or if you have a strong view on the outcome of the elections, then you can invest in an 'Election ...
BMO Investments Inc. Launches Two High Conviction Equity Mutual Funds with ETF Series  Canada NewsWireTORONTO, Dec. 11, 2018 /CNW/ - BMO Investments Inc. (BMOII) today announced the launch of two high conviction BMO Mutual Funds, that are intended to ...
The 5 Best Investments You Can Make in 2019  Kiplinger's Personal FinanceGood riddance, 2018! These are the five best investments you can make in 2019 to recover from last year's nauseating roller-coaster market.
Stocks in the News: Investors Taking a Second Look at Altra Industrial Motion Corp. (NASDAQ:AIMC) After Recent Market Moves  The Coin GuildMajor market players are buzzing over Altra Industrial Motion Corp. (NASDAQ:AIMC) as their share price hit $27.33 at the end of the most recent trading session.
IDFC Tax Advantage (ELSS) Fund - Regular Plan NAV: IDFC Tax Advantage (ELSS) Fund - Regular Plan-Growth Equity Factsheet  Economic TimesObjective: The scheme seeks to build a diversified portfolio comprising of stocks of companies with strong fundamentals that are available at reasonable ...
Making Waves: Investors Zero in on FirstEnergy Corporation (NYSE:FE)  The Coin GuildMajor market players are buzzing over FirstEnergy Corporation (NYSE:FE) as their share price hit $39.54 at the end of the most recent trading session.
Why stopping mutual fund SIPs when stock market falls can jeopardise your financial goals  Economic TimesFear has returned to Dalal Street. Caught in a perfect storm of weak macroeconomic numbers, the IL&FS crisis and fear of more defaults, equity markets have ...
Fund managers ready to go shopping after sharp correction in stocks  Moneycontrol.comMutual funds that were holding around 8-10 percent cash level in their equity portfolio are likely to purchase shares of companies in banking and financial ...
New stock ideas boost equity mutual fund portfolios  LivemintIt is imperative for mutual fund houses to beef up their research capabilities, to be able to identify more winning new ideas.
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
Five stocks that mutual funds think can outperform  Economic TimesA volatile month gave fund managers a chance to cherry-pick stocks.
Is your mutual fund buying or selling stocks too much?  LivemintA mutual fund scheme's turnover ratio tells you how frequently its fund manager buys and sells the underlying stocks. Typically, higher the turnover ratio, more ...
Mutual funds' exposure to banks hits 3-month low of Rs 1.88 lakh crore in Sept  Economic TimesMutual funds' holding of banking stocks declined by over Rs 21,600 crore to Rs 1.88 lakh crore in September, driven by the correction in equity markets.
Small- and mid-cap mutual funds open doors again, but should you invest?  LivemintL&T Emerging Businesses Fund and DSP Small Cap Fund have allowed *fresh* mutual fund investments, taking advantage of a continued correction in small- ...
Shall I buy the HDFC AMC stock or mutual fund?  LivemintThe risk of putting all our money in a few stocks is much higher than investing in mutual funds.
Investing in equity mutual funds versus investing in shares: Which is better?  Economic TimesThe final goal for all stock investors is the same: to get superior returns. However, in terms of what you do, there are two completely different routes.
Value focussed MF are cutting their exposure to Indian stocks. What about you?  Moneycontrol.comAs valuations climb, the funds have chosen to stay light on Indian stocks and exposure to bonds and arbitrage has gone up.
Mutual funds that destroyed most investor wealth in the September selloff  Economic TimesThe recent selloff in the stock market has raised fears of a rush for redemption in mutual funds.​
Is it a good time to invest in small-cap mutual fund schemes?  Economic TimesDespite the slide in the Nifty Smallcap100 index, fund houses seem to be placing faith in small-cap funds again. Should investors take the cue?
Why your mutual fund earned you less than Nifty in recent market rally  Economic TimesThe more the number of stocks in an index, the weaker is its performance.
Mutual fund holdings in IT stocks touch all-time high  Economic TimesMumbai: Fund managers are betting big on the IT sector, on the back of an improving global macro environment, depreciating rupee and rise in IT spends.
Mutual fund managers bought & sold these 20 stocks in May  Moneycontrol.comRelative valuations are attractive and around average, but midcap valuations are still looking stretched despite the recent drawdown, Morgan Stanley said in a ...
Investing in stocks needs deep understanding of markets  LivemintDirect investing into individual stocks requires deep understanding of the markets and continuous involvement into investing.
Are mid and small-cap mutual funds holding too many illiquid stocks?  Economic TimesLiquidity has been scarce in Indian capital markets in recent weeks. Mutual funds have also not been spared the pain, with liquid and money market funds ...
How stocks picked by mutual funds over 2014 to 2017 have performed  Economic TimesWhile the most wanted stocks of 2014 and 2015 have done well, the recent picks have disappointed.
Investing in mutual funds? Diversify to reduce risks and enhance returns  Moneycontrol.comIn the worst of the times for stock markets, individuals invested across the asset classes are less hit as compared to investors betting all their money on stocks.
Four Strategies For Managing A Portfolio Of Mutual Funds  InvestopediaNow that you've built your portfolio of mutual funds, you need to know how to maintain it. Let's talk about how to manage a mutual-fund portfolio by reviewing four ...
Bleeding mutual funds: Should you go back to good old fixed deposits?  Moneycontrol.comAre you worried about the losses on your investments in mutual fund schemes? You are not alone. There are many investors who dumped their good old fixed ...
Top stocks bought and sold by mutual funds in June 2018  IndiainfolineInvestors should focus on longevity to create wealth. We advise investors to stay invested in those stocks whose growth story is still intact.
HDFC AMC, Reliance Nippon stocks fall over 9% after Sebi caps expense ratio of mutual funds  Business TodayThe stocks of asset management companies (AMCs) fell in trade today on fears of lower revenues after market regulator Sebi capped expense ratio for mutual ...
Domestic mutual funds are selling these smallcaps and midcaps in hordes. Check out why  Economic TimesNEW DELHI: And you thought midcaps and smallcaps have been under pressure over the past three months because of the Sebi reclassification, requiring ...
Should I cut down my stock allocation and invest more in mutual funds?  Economic TimesMy risk appetite is moderately high and my investment horizon is 10 years. Please review my portfolio. I am investing in the following mutual fund schemes:
5 strategies for investing in mutual fund in the current market to get good returns  Moneycontrol.comMutual fund investing is all about ascertaining your goals and setting out to reach them.
Some international funds are giving around 40% returns. Should you invest?  Economic TimesInternational mutual funds are topping the return charts. The category has returned around 20 per cent in one year. Should retail investors bet on these schemes ...
Here are top buys and sells by mutual funds in August when Sensex, Nifty hit record highs  Moneycontrol.comAmong largecaps, HDFC AMC, Sun TV Network, TVS Motor, Vedanta and Tech Mahindra topped the August buying list of top 10 mutual fund houses which ...
Choose your mobile app wisely to invest in direct mutual funds  Moneycontrol.comSome mobile apps are not updated on regular basis. Often there may be errors in the stocks portfolio of several schemes.
3 Major Problems With 401(k) Plans  The Motley FoolEmployer-sponsored plans are useful retirement savings tools, but they sure aren't perfect.
IL&FS downgrade to hit 35 MF schemes as well  Economic TimesMUMBAI: ICRA has downgraded the debt of IL&FS to a level below that considered investment-grade for mutual funds, putting the spotlight on asset managers ...
Top 10 large, mid and smallcap stocks which fund managers bought & sold in September  Moneycontrol.comFears of a liquidity crunch following the IL&FS crisis hit the mutual fund industry in September. Cash plans, or liquid funds, were the worst hit.
These 10 stocks make up over one-third of entire mutual fund portfolio in India; check full list  The Financial ExpressEven as Sensex and Nifty continue their strong rally driven by a cheer in blue chip stocks, just 10 top names make up a whopping 34% of the entire mutual fund ...
Benefits of asset allocation in mutual funds  Economic TimesWith macros looking weak and stock market indices at a new high, financial planners believe it is important for investors to follow the principle of asset allocation.
Mutual funds' AUM plunges by Rs 2.11 lakh crore in a month  Economic TimesThe drop in the asset base is mainly due to an outflow of Rs 2.3 lakh crore from MF schemes.
6 mistakes that small investors make when stock market is doing well, interest rates are rising  Economic TimesThe biggest mistakes happen when markets are doing well. In many cases, the SIP returns are in the red.
Mutual funds sell financial stocks the most as markets soared in January  MintMutual funds locked in gains in financial stocks the most among the top stocks in January, taking advantage of the run-up in the pack and record high levels in ...
What Is a Mutual Fund? Pros, Cons, Types and How to Invest  TheStreet.comKeep hearing about mutual funds but don't really know what they are? No sweat! TheStreet breaks down what a mutual fund is, the different kinds, and how to ...
List of best mutual fund portfolios as per your risk appetite  Moneycontrol.comYou can build a portfolio of mutual fund schemes based on your risk profile.
Want to invest in ‘value’ stocks like Buffett? Look at these funds  Economic TimesValue investing is a strategy to spot stocks trading below their intrinsic values.
Five basic formats of equity mutual funds you must know before investing  Moneycontrol.comIs it the right time for you to invest in mutual funds? Choosing the right mutual fund in one's portfolio is not an easy task. Here are the five basic formats of equity ...
Are you worried about fall in stock markets? 5 do's while reviewing your stock portfolio  Moneycontrol.comKeep aside the seasoned investors, most investors do lose track of their portfolios, especially when the market is in a bull run.
Do not make these 7 mistakes while investing in mutual funds  Moneycontrol.comNever forget that you are investing because you have to achieve your financial goals. Investing without a goal is akin to travelling without a destination.
How much do mutual fund managers invest in their own schemes?  Moneycontrol.comEver since SEBI mandated mutual fund houses to disclose how much fund managers, directors of the asset management company and other key employees ...
Top stocks bought and sold by mutual funds in April 2018  IndiainfolineMutual funds received record-breaking inflows of Rs6,690cr into the mutual fund industry via SIP in April 2018. During FY18, the mutual funds received Rs67 ...
Smallcap watch: 2 stocks that have been big draw among mutual funds  Economic TimesTwo smallcap outsourcing players from the consumer electrical and appliances (CEA) space — Dixon Technologies and Amber Enterprises — have been ...
Auto ancillaries, consumption stocks top buy lists of MFs  Economic TimesAs the turmoil in mid- and small-cap shares in May tested investors ' nerves, mutual fund managers armed with money from SIP flows made their purchases ...
10 mutual fund options that could be good bets as markets trend higher  Moneycontrol.comInvestment advisors feel this is time for caution and that investors should veer more towards funds with exposure towards large-caps or those that are multi-cap ...
Retail investors hit by Manpasand fiasco: Are mutual fund managers vetting stocks properly?  Economic TimesInvestors in Manpasand Beverages have been left with a bitter aftertaste with the free-fall in the drinks maker's share price. Shares of Manpasand Beverages ...
Best value-oriented equity mutual funds to invest in 2018  Economic TimesEven as the stock market stumbles along nervously, many investors are looking for tools to navigate the volatile times in the market. And suddenly everybody is ...
How SIPs help investors buy low and sell high despite unpredictability of stock market  Economic TimesSystematic investment plans (SIPs) are the best way to invest in mutual funds. The benefits come as much from psychology as from maths.
How to build your mutual fund portfolio from scratch  Moneycontrol.comYou need to know that there is no such thing as a "perfect mutual fund portfolio". There can be numerous reasonably good portfolios, and there's no ...
Mutual fund investment: What to do when stock market crashes  Times NowWith regard to the mutual fund investment, should investors alter their strategies or should pull back their funds out of the schemes at the time of stock market ...
Planning an SIP in mutual funds? Keep these things in mind  Moneycontrol.comYou should identify a fund which has not only performed well when the markets are rising but also tackled the tides of a falling market and has controlled losses.

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