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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

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