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The Alchemist (05/05/2010)
By Al Thomas
DOW 14,000

Can the Dow Jones Industrial Average go back to 14,000, then 20,000, 30,000?

It can do anything it wants. The question is will the investors be buying during the updraft? The next even more important query is will the investors be smart enough to sell when the DOW starts down again? And it will.

There are literally thousands of “experts” who want investor money to advise or manage. Mutual funds that have a very bad record over the last 10 years want people to buy and hold money in their fund. We have seen what a disaster that has been. Look at the price of a fund on January 2, 2000 and then on December 30, 2009. 90% have lost money.

Then there are hundreds of expensive advisory investment newsletters. There is a service by Hulbert that tracks many. A few are winners. You may have heard the radio gurus spouting their stock market wisdom each week. Sorry, their record is not posted.

Your local bookstore has scores of books in the Personal Finance section the will make you rich. Maybe.

You will have to do what the author has done his entire life.

As a professional and former floor trader and exchange member I will tell you these people live the markets 25 hours a day. I know.

Is there any simple way for the small, non-professional investor to make money? Yes, but he will have to look at his portfolio at least once each month and maybe as much as once each week. That’s all.

Most of the time markets go sideways so it is difficult to

buy any stock, ETF or mutual fund and expect it to go up immediately. However, once a trend is established it will stay in place for a long time, sometimes years.

To be successful and that means not only buying as the market goes up, but selling and being in cash while the market goes down. The secret of the market is not buying – it is selling.

It is keeping profits when you have them and not allowing new

positions to drain the portfolio if it goes down instead of up..

What is the most scary to me is when everyone is either bullish or bearish. Today it is hard to find a bear. They are all back sleeping in their caves, but they have not gone away.

Almost every forecaster today is predicting a continuation upward of the current move. And it may be so. Ask any true professional trader and he will tell you he doesn’t know, but the trend is up so that is how he is trading. All pros will tell they “don’t know”.

Find and invest with a simple trend following method. The investor doesn’t have to know anything. He is always going with the flow either up or down.

DOW 14,000. I don’t know.

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 2010 Williamsburg Investment Co. All rights reserved.

 

 

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