Skip to main content

A Few Tips from the Wise

By Rick Walter

Good morning my fellow investors. Hope we all have a great day today. There was a little blood in the streets yesterday, with a broad sell-off across the board. Well, I've been calling for a slight sell-off for about the last month, because its always a good thing for the markets to blow off some steam after rising consistently for so long. You know, you got to keep the bubbles from forming. Further selling depends on how key parts of the U.S. economy continues to recover, which in my opinion is dependent on the manufacturing sector. A report from Automatic Data Processing said the "U.S. private sector shed 298,000 jobs in August, a faster rate of job losses than the 213,000 economist were expecting." Still, not as high as the same time ago last year but pretty substantial. So what are we going to do?

A few tips from the wise. Review your investment strategy daily. Avoid going after high fliers. Avoid trading on rumors. Avoid trying to time the bottom. Make sure that at least 10-15% of your portfolio stays in cash. Weed out the weak positions in your holdings. Don't be afraid to sell a stock if it has not performed. Oft times we get caught up in marrying a stock for whatever reason. It's about performance baby. Avoid investments that tie-up cash for more than five years unless you are investing directly in physical real estate. Finally, just because a brokerage house is offering stock trades at $2.99 per trade does not make them a good advisor.
9/2/2009

Comments

Popular posts from this blog

The Old Reality is Still the New Reality

The Old Reality is Still the New Reality  Dodd Frank Illustration   I sat at my desk last week wondering what went wrong. Was I experiencing some type of trading depression? I checked my models, macro numbers, company profits, software, pricing etc. Some of my option contracts were either worthless or were on their way to being worthless.   The pricing of the contracts were not in-line with the actual underlying price of the securities that I was trading. The options' pricing per contract were either priced 40% or more above what the underlying security was worth or priced 40% or more below what the securities were worth. This old reality was still the new reality even after all of financial fixes implemented to fix these same problems that contributed to the financial meltdown in 2007-2008.   The new Dodd-Frank Wall Street Reform and ConsumerProtection Act which was supposed to clean up many of the abuses in the financial system such as accountability, transpare

What to Buy- Foreign vs Domestic funds?

Calm before the storm. At least that's what I've been reading. It seems that there is still not much buying. Much of the buying seems to be just shifting funds from one account to the next. It's called "churning" in broker turns. So, I wanted to see if anyone was buying, you know, new money. I clicked on over the Investment Company Institute website to see if they could shed some light on this matter. Based on their recent reports, "Estimated inflows to long-term mutual funds were $ 12.48 billion for the week ended Wednesday, June 10, 2009 ", versus $ 13.646 billion for the week of June 3. At least it wasn't negative. There is buying. As a matter of fact, buying has almost doubled compared to inflow numbers reported in May. I also noticed that Equity Foreign Funds had a larger percentage increase than other categories while Taxable Bond Funds had a noticeable percentage decrease in inflows as compared to the previous periods. Interesting. Are in