Truly Affordable

Back in the days car alarms were cheap sound devices, which were as loud as easy to shut of. Usually a wire cut was enough to allow the thief to drive away with a stolen vehicle, and even when the noise was on, a very few times the police had enough time or interest to intervene. Sometimes alarms kept on going for hours, without anyone worrying about it, except for the poor people, whose sleep was brutally interrupted. Today car alarms have changed a great deal and only to the up side. Cities are less noisy and car owners can rely on some serious protection, instead of just a random noise.

Of course, new technologies made car alarms almost like items from a science fiction film, where car owners get to enjoy full protection and slick devices that can do amazing things. Stolen cars can now be tracked down and engines can even be shut off without the proper activations codes. All of this is a true revolution for the car alarm industry and the future might just bring more, making it really hard for thieves to steal vehicles. This way everyone can now sleep tight, as no random noises will go off, but mainly their cars are safely parked in the street, of course if they have the proper car alarm.

The quickest order (but usually not the best) is a market order. This is an order to buy or sell at the current bid(buy) / ask(sell). Market orders are filled according to the time they reach the exchange. A 9:32 market order on XXXX stock will be filled before a 9:33 market order on XXXX.

Nasdaq stocks are all bought and sold electronically. That is,
when an order is placed to buy or sell a stock it is immediately matched up with the best priced Market Maker or ECN Electronic Communication Network).

The New York Stock Exchange is a specialists exchange. That is, your order goes to an individual on the floor of the NYSE. It is his job to maintain order and liquidity in the stock he specializes in AND put money in his pocket (they never tell you that).

Now here comes the problem for little online stock buyer…YOU.

You see stock XXXX trading at $50 so you call your broker or click on your buy button at your online account for a market order to buy XXXX at $50 for 200 shares and boom, your confirmed at 50.18 or even worse.

What happened? You just paid full Retail for the stock. Extra $36 bucks right out of YOUR pocket. The price was actually 50 bid and 50.18 ask on XXXX stock. You seen $50 on your quote “streamer” but you placed a market order to buy. And where do you buy…that’s right from the best priced seller(ask), which in this case is $50.18

Can you imagine what happens when your order is placed in “the hand” of someone on the NYSE floor? Lets just say he is not looking out for your best interest.

Now if you had used a LIMIT order to buy 200 shares of XXXX at
50.01, guess what. Yep, your order is placed as the best BID
(50.01 is better than 50) and the first rookie trader that comes along and places a market order to sell his XXXX stock is boom…confirmed at your best bid (50.01) when he could have gotten a higher sales price.

Get the picture, now your taking the money instead of giving it.
You could have also used a stop buy, a stop sell, a stop limit buy or a stop limit sell. If you ever buy or sell a stock you need to at least know the basics.

For a FREE report on HOW TO TRADE FAST, enter your email address at:

http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826

Most of you know that the trading game is intense. Most of you at least understand the fact that 90% of this game is mental. In fact, because you are out there “doing it alone” it’s the toughest one on one job I’ve ever seen. There is no team to support you, you have to make decisions on a daily basis and those decisions are based on real money. YOUR money.

The single biggest problem people have is not being able to take a loss. It’s just that simple folks. People hate to admit to themselves that they’ve guessed wrong and will let a bad trade get worse because they don’t want to take the loss and move on. Being stubborn in that regard has hurt more traders than any single trading issue on earth.

If you’ve been with us for any length of time, you see that we are generally very fast to pull the plug. If something’s going the wrong way, we eat our pride and pull the trigger. Now consider this. When you make a bad trade, you swallow your pride and dump the position so you can go fight another day. When we do it, we have to put it in the letter and EVERYONE gets to see it. Talk about pressure!

The only way to survive in this game is to be proactive. When a position goes against you, you take a small loss and move on. Don’t dwell on it, just go forward. No one ever gets it all right. No one. So, don’t let a small loss of say 50 cents or a buck, turn into a 4, 5, 10 dollar loss. Rack up a few of them and your trading account will bite the dust. When you are wrong, face the music, admit you went wrong and get the heck out of Dodge. If you minimize the losses, you can have several of them in a row, and one decent gainer will outpace all of it and you will have made money. Sell the losers quickly.

For a FREE report on HOW TO TRADE FAST, enter your email address at:

http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826

Unfortunately, most of you who are reading my column are suffering some substantial losses in the stock market. Whether it is mutual funds or individual stocks everything with mighty few exceptions is going down. Maybe you are just giving back some nice profits, but maybe it is beginning to bite into your original principal.

You are wondering what should I do? I know, I’ll call my broker. He knows all about the market. Please! Don’t ask your broker. I already know what he will tell you. The usual Wall Street smoke and mirrors answer. “Don’t worry. This is just a healthy correction in a bull market. It will come back”. It makes me sick to hear this kind of nonsense from a supposedly informed and intelligent (?) person. By the way, what is “healthy” about a 38% “correction”?

If this guy was so smart when he had you buy these stocks and mutual funds then why wasn’t he smart enough to have you sell before you gave back 50% or more of your portfolio? He is working under the guise of investment conventional wisdom that is conventional but not wisdom. “Mr. Mushroom, you are in for the long term so don’t worry about these aberrations.” YUK! That is what you are - a mushroom. Grown in the dark and fed you-know-what.

There are times when you should have on only one position - CASH. Cash is a position, but brokers are not taught that. They never heard of it.

When I was a floor trader guys would come to me and say, “Al, what do you have on?” and my reply, “Nothing” drew a shocked look. “How can you be down here on the floor and not be trading?” It is very simple, I was there to make money, not to trade. Many times you should not be doing anything. It is the same for the average investor. He should be in cash when there is a bear market as there is right now. How long it will last I don’t know, but I will know when it is over and the bull has returned. Your broker won’t know because he has not been trained to make money, only to make commission.

Every stock and mutual fund you own should be examined regularly (preferably weekly) and a stop placed under each position so (just in case) that hummer decides to tank you will be out with your profit. Never let a winning trade go to a loss. You must protect your capital at all times.

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 2005

al@mutualfundstrategy.com; 1-888-345-7870

Easy access to investing information and the availability of online trading has made life much more enjoyable and less costly for do-it-yourself investors. The Internet has brought the “trading” desk to millions of households and it is now possible to buy and sell shares, options, warrants, interest rate securities and managed funds from your own home. All you need is a computer and an internet connection. In addition, you can do your own research on a particular company or fund manager as well as finding out what some stock brokers are recommending to their clients. Much of this information is free or available at a reasonable cost and you can save yourself hundreds, or even thousands of dollars in fees and commissions every year via the internet. Rather than go through a full service stockbroker or investment advisor, why not give it a try?

When building your own stock portfolio, here are some pitfalls you need to avoid!

While you can find a plethora of good information on stocks, you can also find very poor information. Each website claims to have the latest hot picks or the “top ten” stock buys and often they contradict each other. Who do you believe and what about the scams?

You will undoubtedly come across websites and chat rooms that give investment advice or tips about investments, but many of these are not qualified to do so. The information may be wrong or misleading and some websites even repeat incorrect rumors.

There is overwhelming evidence that you will not become rich by listening to the advice of others. As an investor you need raw information, not recommendations. You would not buy a car just by looking at it…nor should you buy a company’s stock without doing significant research. There is no point trying to take control of your finances if you are going to rely solely on a “tip” from a newspaper or a broker or an internet chat room. It is true that someone may know more about a particular company or stock than you, but they could easily be wrong - so do your own homework!

You need to be certain that you have sound reasons for investing in a particular company. Does the company have an instantly recognizable name? Do you understand what the company does? Do the products or services of the company stand a good chance of being in high demand in a 10, 20 or 30 year time frame? Does it have a management team that moves with the times and is innovative, yet keeps a firm grip on the company’s finances? Most of this information is available in a company’s Annual Report, but make sure that you read it with a degree of skepticism…most reports are written to promote the company.

In the Annual Report, the financial statements, the balance sheet, the profit & loss statement and the cash flow statements are very important. They are important because they will help you assess if the company is providing value for your money. You are going to be buying stocks at a certain price and you will want to make sure that you are not paying an excessive amount. The financial numbers give you a snapshot of the financial structure, strength and growth rate of the company. This type of analysis is often called fundamental analysis, and also includes analysis of the economy and industries related to the company.

Keep in-mind that the historical and present prices of a stock hold clues to the future price. In practice, most analysts use fundamental analysis for short and long term buy/sell decisions and use technical analysis to confirm the decision.

Internet websites are a great place to collect information about companies. Naturally, a company owned website will attempt to portray the company in the most sympathetic light. Depending on how serious you want to be about investing, it is advisable to either visit or subscribe to investment research websites. Research websites are valuable tools for any investor and provide company reviews, give general investing information, market updates, stock pickers, stock ratings, watch-lists, portfolio managers, charts, share indexes, newsletters, alerts and model portfolios.

So, how can you structure a stock portfolio to maximize your wealth, ensure your peace of mind, give you total control of your investments, be easy to manage and give satisfaction?
Here is a recommended strategy that has worked well for many do-it-yourself investors:

1. Subscribe to a well respected investment research website dedicated to analyzing financial information for investors. They are independent from companies they list, do not receive commissions or brokerage and rely solely on investor subscriptions for income. They have to give their subscribers quality information to maintain subscriber confidence.

2. Look for the model portfolios they have developed and study the methodology they have used to create and maintain each portfolio.

3. Read the research reports supplied for each stock and study the graphs supplied for price movements and trading volumes. Get a good feel for both the long term and the short term trends of the stock.

4. Test each portfolio within a designated test period i.e., one month, one quarter, one year etc. Depending on the website, you can set up each of the model portfolios in a free portfolio manager provided on the website with unlimited stocks. Set a starting date for a test period where you “buy” stocks listed in the model portfolio at the closing price for that day. Make sure you include brokerage as it is part of the cost base for the stock. The website should either maintain up-to-date or 20 minute delayed stock prices, so a running balance can be maintained for the profit/loss for each stock over the designated period.

5. Compare each portfolio’s published results with the results that you have achieved in the portfolio manager. They should agree with each other when the same stocks are compared over the same time period. Your testing should develop a level of confidence in the model portfolio.

6. Determine the best model portfolio for you to use. You can do this using the last the last three months of stock price history or perform a trial evaluation for the next three months of future prices. You can use one of the existing model portfolios or create your own from the stocks selected.

7. Subscribe to an online share broker website and begin trading.

8. Monitor stocks daily and review the performance of your actual portfolio against the model quarterly.

You should take care to evaluate the methodology used by the research website to develop the model portfolios. These portfolios are designed by research firms to provide sensible medium-term portfolios that make it easy for investors and financial planners to replicate. You need to understand the research methodology and develop a level of confidence in it rather than just blindly accepting the published results of each portfolio. You do not need to become an expert in methodologies.

Building a share portfolio that meets your investment objectives will substantially build your wealth over a period of time. You can also save money in commissions and fees, have peace of mind, total control over your investment and gain a real sense of satisfaction.

As a final word of caution…nothing is for certain in this world except for death and taxes. This also applies to the stock market. Be prepared for some ups and downs and be ready to sell stocks to cut losses. If the core of your portfolio is made up of stocks that have strong capital growth and a reasonable dividend you will do well overall. Have “at it” and good investing!

Eri Rahman is the owner of http://www.AllTradingSecrets.com, a fine resources for free training and education in stock trading. He also maintains http://www.AllTradingBooks.com, a very useful resource for smart traders.

There is no doubt about his experience in stock and options trading, since he is a daily trader.

Remember in the 1990’s when we got our 401k plans, we could invest and forget. Some of us could even self-direct funds and buy the stocks we wanted. The problem with this over the years is that 60% never adjust their funds. At age 22, your risk aversion is different than at age 62. What I’m saying is if you lost it all at 22, you still have time until retirement. At age 62, you’ll be a greeter at Wal-Mart.

A new type of fund has emerged. Its called a life-cycle fund. This fund adjusts as you age. It will move money for you as you grow older from stocks into bonds. This reduces your risk and you don’t have to worry about your retirement.

Sounds good, but don’t switch your 401k yet. Most of these funds are too conservative for the average 60 year-old who may live an additional 25 years. Also, your retirement financial needs may differ from another investor, so you may not fit the mold.

But there are some clear advantages. Life cycle funds are better than investing entirely on your own without financial advice. They typically offer better results than individual investors. 1 percentage point makes a big difference.

Retirement and 401k’s are never a set it and forget it type of investment. Always keep track of your money. But if you feel you may not be as dedicated as you should, pick a life-cycle fund that will hedge your bets.

Stuart Simpson
http://www.401k-review.com

I bought the e-book and started right away. I was very much
hesitating because there’s a lot of stuff around that is really
crap! But this e-book is very very complete and easy to read.

http://dutchgold.richjerk.hop.clickbank.net

I like to recommend it to anybody who wants to make money on the
internet!

The new high/new low ratio (NH-NL) ratio has been around for many years but different investors use this indicator in different ways. Some investors plot the ratio on a chart using the number zero as a neutral designation with positive numbers equaling more new highs than new lows and a negative number equaling more new lows than new highs based on a specified period of time. I have developed and used the NH-NL ratio in a completely different way from some of the more popular methods. I started to follow stocks making new highs while reading the paper Investor’s Business Daily many years ago. I didn’t use the news highs as an indicator but I only studied stocks to buy from the list. As I became a more experienced investor, I subconsciously started to gauge the market while noting if the new highs were increasing or decreasing. After the stock market bubble burst in 2000, I started to record the difference between the daily new highs and the daily new lows. I would enter them into an excel sheet along with the price and volume of the major market indices and study their relationship. Within two years, I was convinced that the major market tops and bottoms could be located easily by aggressively studying the price and volume of the major indices and studying the ups and downs of the NH-NL ratio. The general market indices often give investors false moves in all directions and many market services and investors have developed new indicators to help assess the market to try and pinpoint turning points without great success. Many of these secondary indicators are successful in showing the investor if the market is weak or strong but they fail to pinpoint the strength or weakness of a turning point with great accuracy. Many of these secondary indicators give false signals along with the general market indices.

With several years of serious study under my belt using my method of the NH-NL ratio, I have accurately protected my money during downturns and have accurately guided my buys when the market has reversed and started a new sustained up-trend (not a head fake).

How do I use my NH-NL ratio?

I start by recording the daily new highs and new lows from Investors Business Daily (my preference) but you could use any free or paid service on the web. Over the past five years, I have developed key levels that the market must reached or violate to trigger certain actions. I am not pulling any of these numbers from thin air as they are all based on actual experience and have not been derived from back testing. For a market to convince me that it is following through and is starting a new up-trend, it must present me with a minimum of 500 new highs per day on a consistent basis. When a week ends, I add the weekly NH-NL totals and divide by the number of active trading days to get the weekly average. The average must have a minimum of 500 stocks per day for me to consider risking over 50% of my cash in new positions (the new leaders). Once the weekly averages reach 800-1,000+ stocks per day, we know that the market is in a full fledged rally and you can start to commit your entire trading stake and use margin. In 2003, the market gave numerous instances when the new highs topped 1,000-1,200 stocks per day, a very impressive amount. When the market shows strength like this, the trend has become obvious and you must have your money working for you by following the trend. Keep in mind that 75% of all listed stocks will follow the general trend of the market.

Recently in September and October of 2005, the NH-NL ratio has been negative, meaning that we are seeing more new lows than new highs. When this type of action happens, you must lock in profits and move your cash to the sidelines. It is not safe to invest on the long side of the market when the ratio is negative. Often times, a bear market may be forming when the ratio weakens and turns negative. If the market confirms a bear market or down-trend, it can be an opportune time to make money shorting stocks or using advanced strategies with options (I only recommend this for advanced and experienced traders). You must determine f the market is in a down-trend or if it is trading sideways. If it is trading sideways, it will be better to pull your cash to the sidelines and wait for a direction to form (either up or down). This article is being written and published on October 25, 2005, the first day after the NH-NL ratio has turned back to the positive side after 13 consecutive days of a negative ratio. The past two weeks have averaged negative ratios with some days only reaching 15 quality new high stocks. This type of weak action could signal a bottom in the market as we get ready to form a new rally. The most crucial indicator to watch over the next few weeks will be the NH-NL ratio to see if it can continue to gain strength and increase the new highs to 500 or more stocks per day. If this happens, the current indication that a rally has formed on the major indices will be confirmed and you can start to commit more than 50% of your trading stake to new leaders breaking out of sound bases or stocks moving higher from establish support areas.

As I look back at my archived hard copies of IBD, I can see the strength and weakness that this ratio gave us throughout 2002 and 2003. I am reminded how the ratio went from negative territory in September of 2002 to a positive ratio in October of 2002. After reaching positive territory, the new high ratio soared into the 800-1,100 range in the first six months of 2003 as we were in a strong bull market, the strongest year since the bubble burst. I don’t know what next month or next year holds for investors, but you can get a good idea by tracking this indicator as it turns back to the positive side after a very poor October (2005). I once wrote about the Halloween indicator and I am now convinced that it has some validity, especially if this NH-NL ratio confirms another rally as October draws to a close.

Chris Perruna - http://www.marketstockwatch.com

Chris is the founder and president of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We offer an extended no obligation monthly trial period starting immediately with two free weeks. We don’t stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

With the internet such a huge part of our daily lives, many investors have access to a wide range of instant investment information.

Whether you’re into stocks, bonds, mutual funds, futures or options, there are tons of electronic investment newsletters offering to turn your small stake into a giant fortune. All you need to do is subscribe and watch your portfolio soar.

Yeah, right!

As a practicing investment advisor specializing in no load mutual funds, I have received my share of e-mails from disillusioned subscribers wanting to know how to better evaluate newsletter services.

While there are no absolutes, I can give you a few pointers that might help you make a better decision:

1. Stay away from the most obvious hype. Ads promising to turn your $10,000 into $1 million in 2 years by buying this incredible stock or hot commodity are not promoting investing they are selling gambling. Follow the “If it sounds too good to be true, it usually is” rule.

2. Most mutual fund newsletters won’t make those outlandish claims, but some of them are still pushing the truth as far as they can. So try to get a free issue or two to examine. If you can’t get a sample, check if they have a trial period? How about a money back guarantee? If not, pay with your credit card. These days you’re pretty well protected by this payment method even if the newsletter doesn’t offer a satisfaction guarantee.

3. Consider the editor as well as the disclaimer notes. Is he or she only publishing a newsletter? Or is he also an investment advisor with a practice?

Why would that last point matter? I may be biased, but I believe that you get far better advice from a writer who also is in the trenches every day investing their own as well as their clients’ portfolios. They would have far better insights as to what works and what doesn’t than someone who has the theory down but no practical experience.

4. Look at the investment recommendations. Are they suggesting you buy into a certain orientation such as mid cap, small cap or large value? Or are they picking specific investments based on a variety of technical indicators?

In my no-load mutual fund practice I use specific recommendations, even for my free newsletter subscribers. They are first based on my trend tracking indicator giving us the green light and secondarily on the selection of mutual funds based on momentum analysis.

The more specific the recommendations, the better, because that allows you to follow along either just on paper (which you should do at first) or with your actual portfolio.

5. Are they recommending when to sell a mutual fund either because of gains or to limit your losses? This to me is the most important issue. If there is no plan in place for getting out, how will you ever know when to sell? This has been the greatest downfall of most publishers (and investors!) since the bear market of 2000 not selling even if market conditions dictate it would be in your best interest to do so.

The advice of most newsletter services can make you money in bull markets. However, with the continuation of the bear market still a distinct possibility; be sure to look at any newsletter’s investment advice record since 2000.

For many people investing is an emotional issue. The pendulum swings between fear of loss and greed for greater returns. If a complete methodology for buying and selling is offered in a newsletter, such as one I advocate, be sure that it fits your emotional make up.

There is no sense in following an investment approach, which may have merits, if it means sleepless nights for you. You won’t stick with it for the long term and long-term investing is essential for making your portfolio grow and prosper.

So, the bottom line is to look for a newsletter that:

• does not promise the moon,

• has a track record through up and down markets, and

• recommends an approach that not only is compatible for your investment style but also has an exit strategy so you can capitalize on your gains — in the bank, not only on paper.

Following these guidelines may not make you rich, but it will help you avoid some bad advice.

About The Author

Ulli Niemann is an investment advisor and has written about methodical approaches to investing for over 10 years. He avoided the bear market of 2000 and has helped countless people make better investment decisions. Subscribe to his free newsletter: www.successful-investment.com

ulli@successful-investment.com