Satry; I've been in the market for some years, and unless you can
buy a basket of stocks, and diversify you can't get ahead. Well
only about 15% of the people can make it picking a few stocks.
One big trip-up can take down your portfolio in a big way and
it takes a lot just to get back even, it's not just the commissions
that eat away at you it's when you do have a loser, say a 20%
drop it or others you hold have to go up 25% before your back
where you were. A 50% drop means you have to double your money
to get even. So with "baskets" like SPY you have only one
commision but have interest in 500 stocks, and can do some
market timing "it takes a bit to catch on to it" but don't let
people tell you it can't be done. You just have to go slow
and easy with it at first..and do a lot of home work, a lot.
As it's not as simple as many make out, and even after you
pick up the tricks you have to monitor changes on a steady basis,
the rules don't stay the same under different conditions
you have to use different indicators. Getting a handle on the
indicators is not to hard, but keep in mind it's like forcasting
the weather, and you know how hard that is to hit all the time, in some cases it's a cinch, it will rain or shine..other times
you can't really tell. ( sit the market out when it's not fairly
clear ) you don't have to be invested ALL the time..and the
MM fund pays interest until your indicators give strong enough
signs to go long or short..but learn the long side first and
get good at it before trying the short side which is much more
risky.
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It only cost me $12 to trade into SPY or any WEB. and I trade out
at $12..there are some other things too..sometimes better than
SPY ( in ways ) No load mutual funds that you get via your broker,
find the no transation fee ones..IT cost me nothing to go in or
out of a wide varity of no loads. The fee is paid by the fund,
and is part of the expence they take out of the pool. This is
a little like cheating, and they don't care for market timers
as you add to their overall expence at the expence of the steady
hold and die brain dead mullets they love. The disavantage of
the fund thinhy is you have to accept the closing nav that
day going in or out. Just watching their main holdngs won't
always tell you if the nav is going to be up or down..funds
you have to take a longer shot at..a week or two anyway,
sometimes several months ,unless things go bad, then you dive out asap.
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I've traded a lot of stocks..and had some winners and see some
all the time I would like to own, but I'm training myself not
to go back there..stay with the baskets, or the funds..it may
look slower but it's not. This is the case were the turtle out
smarts rabit, some funds have high BETAs, they swing a lot
and can out run the market in up trends, but lose more on
down trends..you have to find em chart em and track em. It's
a pain but not as much as stock picking.
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I still have one stock divest myself of, from then on it's going
to be all baskets and or funds all the way. You can play sectors
this way as well. I just looked at some Asia funds that have
lost half their value in the last year, but a few of them are
showing good signs now..and just might out run the heck out of
our market..now I won't go all Asia either.
There are some funds that specialize in small caps that have
really gotten killed the thing here is finding one that has
bounced back before..has the same manager and shows signs
of turning up..then hitching a ride up. These gain faster when
they gain and lose faster when they lose than the market.
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Market Timing and Baskets I'm convinced it's the way for the
small trader to whip the market. Useing the baskets to ride
up, stepping out of the down turns, but connecting the up
turns..and with time..shorting some of the down side, but
not untill you know you are good on the up side, and have
results to prove it..other wise you will lose focas. Market
timing takes a lot of focas, but beats picking stocks.
Let the pros pick the stocks, you just use indicators
to figure out when they are about to do a good job of it.
Here is a url; pasco-res.com
read every thing on it..I'm not saying I agree with it any were
near 100% but I know what he is talking about. Personally I
won't buy the tape, but if your new at this you might want to.
He seems good but don't let it or any one tell you there is
a bible on the market, like I said rules change with time and
or conditions, at least many of them do.
In one way what I do could be called TA, but I don't just use
the canned versions..nor does he.
Jim
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