By Al Thomas
I wonít keep you in suspense. I donít know, but we are getting close and if you apply what is laid out here you will not lose your money as you did in 2008.
If you own mutual funds, ETFs or stocks you will know more than 90% of the brokers and fund mangers. The few who know what is shown here will not apply it for their clients. Why? Because it will show the investor how to be out of the market during major down moves. They donít make money when the client is in cash, Yes, it will also indicate when to get back in when the market turns bullish again.
Brokerage companies really donít care if you lose money. During 2000 break and the 2008 crash they all made money. As long as the investor has on a position they make about 1%. Not much, but one heck of a lot better than the 40% loss for the client. That is why they preach BuyNhold.
Up and down cycles are normal. When an investor learns how to take advantage of them he makes money. Otherwise, he is a loser.
One of my subscribers called me about a week ago. He was getting nervous because the market was approaching the two previous highs where his account had taken a dive. His account was $107,000 in 2000. It declined and came back up to about $107,000 in 2007 and dumped again. Today it has come back up again. Now what?
For the past 12 years he has not made any money. He is NOT ďevenĒ. The purchasing power of the 2000 dollar is much less today than it was due to inflation. He has lost money. Most people have.
Here is the very simple method that works extremely well for all major indexes, mutual funds and ETFs. In every country.
On your computer put up a 5-year weekly chart of your fund. Most folks havenít seen their portfolio come back to ďevenĒ. Add a 40-week Simple Moving Average.
You must learn to ďtime the marketĒ. Of course, your broker will tell you it canít be done. He is either lying or stupid. It is easily seen the DIRECTION of the line. When the line is going down the investor is in cash. When the line turns up the investor is long (owns) equities.
Do not pay attention to the price penetration of the line by the fund. Only when the line turns down the investor sells at whatever price the equity happens to be. Period. End of story, This works well for mutual funds and ETFs, but not as well for individual stocks.
Now sleep well and donít worry about losing your hard earned money in the coming decline.
Copyright 2013 Williamsburg Investment Co. All rights reserved. Al's new ebook (32 pages) is available on Amazon.com for 99 cents. It explains the Golden Cross and the Death Cross. These are well known methods of determining long term trends in the market. If you only learn one method of technical analysis this would have kept you out of the 2000 and 2008 crashes and will keep you out of the next one that is coming soon. The title is Never Lose Money In The Stock Market Again.