Tired of buy and hold? Try this instead
A time-tested investing method can be used successfully by billion-dollar hedge fund managers and small investors alike.
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There are as many techniques to investing as the day is long. Analyzing charts has been around for years, My feeling it is not possible to turn a $30k investment into $80 Million without knowing something the other guy doesn't. It had to be based on some kind of secret data or method.
Analyzing for charts is certainly no secret, as so many people are doing it looking for an edge. As it is a common method, I can't seeing it producing uncommon returns. Simply beating the market trends (S&P and DOW for example) is an uncommon return. If too many people do the same thing, how can you really expect to do well?
I generally accept the notion that someone who uncanningly beats the markets must have access to data just not available to the daily layman.
Its buy and hold for me. - Remember these people make their money when you are buying and selling so its in their interest to get you to constantly buy and sell. Don't fall for the Trap !
Sounds like a very trading intensive strategy, especially with the use of option stops. Whether or not the investor makes money it's guaranteed to be great for their broker.
Trend following is nothing new and studies have shown that many people lose money, perhaps more than gain money, following it.
At the same time, blind "buy and hold" is not wise either. Personally, I don't buy I stock I expect to own less than three years. I own Abbott Labs, Exxon, and Cracker Barrel Old Country Store that I originally bought in the early 90's through DRIP plans in order to get around the typical $183 dollar commissions Merrill Lynch was charging in pre-Internet brokerage days.
But every December, I review my stocks in terms of management, sector changes, competition, and income, revenue, etc. data. I give myself a two-minute informed speech as to why I should keep or sell each stock (I do a similar speech any time I buy). I also have a rule that if a stock drops below 75% of what I paid for it due to ordinary events (no Japanese tsunami, etc.), I admit I made a mistake and sell it. That ensures my ego won't get in the way. For example, I bought HPQ at $35, then sold it at $26 even though I think it will turn around with so much positive cash flow to fund it and good positions in servers and other non-PC areas. But now it's $20 and selling at $26 prevented another nearly 20% loss on my $35 investment.
Just another example of those with vested interests attempting to convince (or dupe) the public in believing there's a way to predict which investments will rise, and when they'll rise. The markets will provide the returns over time based on risk/return relationships - not Wall Street firms and publications using speculative strategies to enhance their own pocketbooks.
is the investors business daily (IBD) considered a trend follower?
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