What To purchase Now

I am sure that if you have Funny Face brokerage account with a "full service" broker you have been getting calls about what to purchase and sell. If you have big losses in certain stocks you might be hit with that great Wall Street lie to purchase more so you can 'Dollar Cost Average'. It doesn't work.

In a recent study going back for 5 years a dollar cost averaging program was set up buying the S&P500 Index mutual fund. At the end of 62 months the investor had put in $31,000 and it was now worth $31,162. You would have done better in a savings account at web conferencing bank. And that assumes there was no commission or fees of any kind.

Let's say you owned a stock such as Cisco. that one is held by hundreds of thousands of investors and almost every one of them has a loss. It traded as high as $82 and for more than a year was in a range over $50/share. It was the darling of very broker from here to Timbuktu and when it started down they kept yelling purchase more, purchase more. Another one in that same category is Lucent going from about $80 to $5. Yuk!

Now Wall Street is trying to get you to purchase more of these losers so you can "get out even" when it cheap life assurance back up. And pigs can fly. Think about that. The person that currently owns these stocks or any similar ones with big losses is now waiting for them to go back up so they can "get out even". Ho boy. It should be extremely obvious that every time one of the monsters sticks its head up it is going to be hit with tremendous selling. There isn't a chance that any of them will ever get back to their old high prices or even close.

What does an investor do? Clean out your garage and have a yard sale. Get rid of that junk and put your money to work where there is a chance to make a profit. And don't purchase any stock that has lost 50% to 80% during the bear market of the last 2 years. Brokers will tell you these are now "cheap" and are a good purchase. Not a chance. There are too many persons waiting to sell.

Now is the time to try to find a completely different equity that did not get hammered last year. Look for one that has a nice smooth upward pattern. purchase it and that time know how much loss you will be willing take if it goes down. How do you do that? Very simple. Use a trailing loss limit order called an open stop-loss order about 10% under the lowest price of the previous month - and keep moving it up as the price advances. That way you will not give back profits.

Al Thomas' book, enterprise web hosting It Doesn't Go Up, Don't purchase It!" has helped thousands of persons make money and keep their profits with his simple 2-step method. Read the first chapter at www.mutualfundmagic.comwww.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005