Where Is The Rabbit?

We need a rabbit!

This was a pretty horrible week for the market with two 100-point days and Friday closing on the lows.

During these past few days Sir Alan told us things are looking up and the economy is basically strong. Mr. Market didn't hear him. It seems that jaw boning can't get people to buy. In fact there were more sellers than buyers.

If you go back in history it is a truism that has become conventional wisdom that the stock market goes up during an election year. The reasoning is obvious. The president - who ever he is - in office will pull out all the stops to create the illusion that the economy is in good shape and he is the one who takes credit for it. Both Mr. Bush and the Fed chairman better get their best top hat out and reach way down for that white rabbit.

It is going take some real magic to get folks in a buying mood. The lower it goes the less likely they are to buy. Of course, brokers are calling and telling investors, "This is the break to buy. Stocks are cheap. Better get on board now. You can't let this opportunity pass by. You can't afford to be out of the market." And on and on with the platitudes. Don't believe any of that hog wash.

What brokers should be telling investors is to protect their money by placing stop loss orders. You can be sure that won't happen. The big brokerage firms frown on stops and punish brokers who encourage customers to use them. Fortunately, when I was a broker I worked for company that did not penalize this concept and I refused to take a customer who would not place stops when they bought something. That is why I never lost customers and had them for years.

This year the major indexes (DOW, S&P, and NASDAQ) are down. Not a great deal, but definitely lower. This means for those who invest in index mutual funds that they are running a loss. Brokers always say, "You are in for the long haul" so not to worry about what is happening now. That's what they told you in 2000 and you still have not recovered your losses from then.

No brokerage firm tells the true story of the secular bull and bear markets. These have occurred with great regularity for the past 200 years and will, if history continues to repeat, follow the same course. The shortest secular bear has been 8 years and the longest 25 years. At a minimum we are not half way through this one. Prudent investors (and I hope that's you) will protect their portfolios with stop loss protection on every position. Every broker and financial planner will advise against it, but it your money not theirs.

The market is not magic. Hocus pocus and white rabbits will not make it go up for very long. Illusions are not where it's at. Forget the brokers' abracadabras and place your stop loss protection today.

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.

1-888-345-7870; [email protected]

In The News:


Stealth Bull

If you have been watching the stock market at all... Read More

Buy Low - Sell High

Now where have I heard that before? I know. It... Read More

I Love You, Warren Buffet

Sometime around 1980, can't remember exactly, there was a flight... Read More

Nest Eggs and Omelets

Do you have a nest egg? You know, a place... Read More

Can?t Stand The Heat

It seems that every day I turn on the TV... Read More

Maximizing a Stock Market Investment

Maximizing a stock market investmentThere are several factors an investor... Read More

365/7/24

What does it take to be a stock trader? It... Read More

Frog In The Pot

You remember the story about the frog that was put... Read More

Hill of Hope

Just about now everyone is confused as to which way... Read More

Defining a Long-Term Investment in the Stock Market

For some "long term" would mean holding a stock position... Read More

Market Timing

Every broker and financial planner will tell you that you... Read More

Fools Gold

The stock market has been in an up trend for... Read More

Hedge Fund Advertising

Have you seen all those big full page ads for... Read More

Overvalued & Underbought

With all the bad news that has been dumped upon... Read More

Gurgle Gurgle

Caught in a whirlpool and being sucked under. No life... Read More

Why Change Funds?

On November 17 I bought 7 different mutual funds and... Read More

How to Pay Less and Get More: Discount Broker vs Professional

How do you invest? What do you really pay? At... Read More

Trading Systems

To become a successful trader you must have some kind... 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

Where Is The Rabbit?

We need a rabbit!This was a pretty horrible week for... Read More

Option Trading Basics

Options trading can increase the profits you make when trading... Read More

Different Types of Mutual Funds

This is a guide to the different types of mutual... Read More

Successful Trading ? Taking Profits - Part 2

Suppose your position has made a big move and you... Read More

Diversification

Wall Street's watchword has always been diversification, but what does... Read More

Making Outsized Returns in the Stock Market - Using the Dow Theory

The Dow TheoryCharles H. Dow... Read More