Article Page

Getting Even
By Al Thomas Platinum Quality Author

I know there are a lot of you out there who would like to "get even" with the stock market. Many are on the diet of "I hope, I hope". As a professional trader I can tell you that diet will make you very sick.

If you play any game of chance like poker you know you are not going to win every hand. In fact you are going to lose more hands than you win, but at the end of the evening you can still come out ahead if you know how and when to bet and when to fold because it is not always in the cards that you have been dealt.

The same applies to gambling in the stock market. Oh, did I say a bad thing? Al, go wash your mouth out with soap. My broker says buying stocks is "investing", not gambling. And pigs can fly. Wall Street is just Las Vegas East and like poker you can be cleaned out. Oh, you already know that - in spades!

The teachings of Maul Street are that you buy a good stock or fund and hold it forever. They did not tell you that you may have drawn a 2, 6, 10 off suit and there is no way it will be a winner. They never tell you to fold your hand (sell). At least you are not losing money every time a card is dealt. With stocks they deal a new card every day called a price change. If the stock, fund or index you own goes steadily down over a period of time don't you think it would be wise to fold your hand and sit with your chips?

No, your broker will never recommend this because he gets paid every year you have your money "invested" in something, anything except a money market. It may only be one percent, but the brokerage company can live off that even if you can't.

I know, you are telling me you are "in for the long haul". What Wall Street genius thought up that one? In this high stakes game you must remember it was to leave with more money than you started and not to go broke or stay even. When the market is going down you want to be OUT, not sitting there every day hoping (and praying) your shares will go up. They won't. Like poker you have to take a small loss and wait for a better hand which may be quite a while. YOU DON'T HAVE TO BE INVESTED ALL THE TIME. Many times cash or bonds will make more money than owning stocks.

When the market is going down even the best stocks will fall. Understand you are not going to win every pot. Small losses will not hurt you. It is the big ones that can wipe you out. Know the amount you are willing to risk when you buy any stock and fold when that loss limit is hit.

You are not investing to "get even".

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.

Article Source: http://EzineArticles.com/

Hedge Funds
By Al Thomas Platinum Quality Author

You read and hear a lot about hedge funds. Unfortunately, most of what you hear is negative because it comes from the major media that has an interest in reporting negatives about them because the major media is supported by so-called standard mutual funds and brokerage companies that spend big bucks for advertising. Hedge funds are NOT allowed to advertise.

First of all a hedge fund is almost identical to a mutual fund. There have actually been fewer fraud complaints about hedge funds than about mutual funds. That doesn't mean they don't lose money just as regular mutual funds do.

The underperformance of mutual funds is not highlighted in the press; you don't bite the hand that feeds you. I'm talking about advertising revenues. Would Janus, Invesco, Vanguard or any big fund family continue to place advertising dollars with someone who told stories about their losing funds or recommended that investors sell them to find a better performer? Hardly.

Mutual funds use customers' money to buy stock and bonds. Hedge funds are not limited to what they can buy. The can buy or short sell derivatives, commodities, options, oil and gas leases, freight rates and even take an investor's money to the race track (although I doubt if they would). The managers of these funds are specialists in their field of knowledge and many do extremely well. Just because they are different doesn't make them bad. Like all investments you must know where your money is going and how it is going to be invested.

The one major difference is how the fund manager is paid. Regular mutual fund managers are paid on how much money they manage and NOT on performance. Hedge fund managers usually receive 1% of the fund assets that goes for expenses and 20% of the profits they make for their investors. In other words if they don't make a profit for you they don't get paid. I sure would like to see them do that in regular mutual funds, but the Securities and Exchange Commission is the captive of the mutual fund industry so don't hold your breath. The true ability of fund managers would be exposed and many funds would disappear as the smart investors would be transferring their money to fund managers who have winning records every year. Yes, every year. No more of the nonsense of how they beat the S&P500 by 5% yet lost your money.

So many of the hedge fund articles say the investors are being hood winked into putting money into these funds. I don't think so. Almost every big state and corporate pension plan, university endowment, charitable trust and other large financial plans have money in hedge funds. Like any cautious investor they did their due diligence to find out the track record and management capabilities of the hedge fund.

You have to be rich to put money into a hedge fund. They require an income of $200,000 per year and assets of one million or more. Many require large initial investments.

If you qualify they are definitely a better place than a regular mutual fund, but you must do your due diligence.

Article Source: http://EzineArticles.com/

Comments, submissions or ideas? mailto:the_smiling_home@walla.com