KLE 48: Riding The Wave

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Just because YOU know that the market is ‘on sale’ because you have 3 buy signals, it doesn’t mean the market does.

By ‘the market’ we mean all of the professional buyers and sellers who are running the major funds (because they still make up the vast majority of the stock market). It is their activities that determine whether the price of any individual stocks or group of stocks (e.g. the S&P500) goes UP or DOWN at any point in time.

And, as we have seen, the market does not always behave predictably.

So, you need ‘protection’ for your Stock Index (e.g. SPY) purchases. Now, you could do that by buying ‘insurance policies’ over your stocks (usually, in the form of stock market OPTIONS), but that’s way too sophisticated – and, expensive – for what you are trying to achieve right now, which is to find somewhere other than The Bank to park your money while you sort out what your real investing strategy should be (something that we will cover in the next Module).

Fortunately, there is a simpler – and, much cheaper – way to protect yourself; it’s simply to ask:

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I call this gaining Bank Plus returns!

And, if you follow these simple instructions, you’ll do much better than simply keeping your money in The bank while outperforming all of your friends and 75%+ of pro’s with very little risk, in any market!


Task 1: Imagine that you are currently sitting on $10,000 of SPY stock, would you hold or sell it today, based upon its chart?

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Would you Hold or Sell SPY based upon its chart today? (HOLD or SELL)

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Reader Comments

Tip:Buy when ema50 crosses ema100 for confirmation SL (StopLoss) when price goes below ema100. This in case you dont want to exit the market too soon due to volatility. Also never lose more than 1% per position you take it’s called Capital Preservation or also ROC -Return Of Capital instead of On Capital.