Pruning Your Stock Market Portfolio For Success
All of us wish for an ongoing quality lifestyle after retirement.
We are used to a particular lifestyle, and giving it up after retirement would not be easy.
So it is necessary to supplement our social security and pension plans with a steady income flow.
The best option available to us is to invest in mutual funds.
There is only one rule to apply with investing in mutual funds and that is your mutual fund/s must outperform the S&P500 Index (which is only an average) during the last 12 months.
Wall Street might tell you to buy and hold, which isn't a very good idea.
Hanging on to your stocks when they're not performing well enough would only make you a pauper.
Furthermore, stock market experts might tell you that you need to watch the performance of a stock over a period of 3, 5 or 10 years, which I think is not required.
Every stock might have done well 10 years ago but might be in decline right now, and you do not want to buy a stock that is in a downward phase.
The best idea that I would suggest to most investors is to have a close watch on the 200 Daily Moving Average published in the Investor's Business Daily.
This would give you an idea of the stock's movement over a period of 36 months, 24 months, 12 months, 9 months, 6 months, and 30 days.
This is more than enough information for an investor to analyse the movement of a stock and to predict its future movement.
This does take time and effort but the advantage is that you will know how your stocks are performing and you need to trade only when you find that your stock is going below the 200 Daily Moving Average.
This way, you could not only increase your profits but also protect your investment from unprecedented losses.
As an investor, buying stocks and holding on to them will not bring you success.
You need to prune your portfolio from time to time, preferably on a monthly basis.
This requires you to analyse each and every stock contained in your portfolio and make the necessary moves.
The stock that is currently performing the weakest needs to be sold immediately and the money needs to be invested in the stock that is performing the best.
If you plan to add funds to your investment, the money needs to be invested in the best performer at that point in time.
Pruning your portfolio can bring you success and also help you protect your investments, and this is something that you can do yourself.
You do not have to depend on your broker to do it for you.
He will always tell you that it is not a good move.
He is a loser, and you don't have to be a loser too.
Take control of your funds and stay with the best ones.
We are used to a particular lifestyle, and giving it up after retirement would not be easy.
So it is necessary to supplement our social security and pension plans with a steady income flow.
The best option available to us is to invest in mutual funds.
There is only one rule to apply with investing in mutual funds and that is your mutual fund/s must outperform the S&P500 Index (which is only an average) during the last 12 months.
Wall Street might tell you to buy and hold, which isn't a very good idea.
Hanging on to your stocks when they're not performing well enough would only make you a pauper.
Furthermore, stock market experts might tell you that you need to watch the performance of a stock over a period of 3, 5 or 10 years, which I think is not required.
Every stock might have done well 10 years ago but might be in decline right now, and you do not want to buy a stock that is in a downward phase.
The best idea that I would suggest to most investors is to have a close watch on the 200 Daily Moving Average published in the Investor's Business Daily.
This would give you an idea of the stock's movement over a period of 36 months, 24 months, 12 months, 9 months, 6 months, and 30 days.
This is more than enough information for an investor to analyse the movement of a stock and to predict its future movement.
This does take time and effort but the advantage is that you will know how your stocks are performing and you need to trade only when you find that your stock is going below the 200 Daily Moving Average.
This way, you could not only increase your profits but also protect your investment from unprecedented losses.
As an investor, buying stocks and holding on to them will not bring you success.
You need to prune your portfolio from time to time, preferably on a monthly basis.
This requires you to analyse each and every stock contained in your portfolio and make the necessary moves.
The stock that is currently performing the weakest needs to be sold immediately and the money needs to be invested in the stock that is performing the best.
If you plan to add funds to your investment, the money needs to be invested in the best performer at that point in time.
Pruning your portfolio can bring you success and also help you protect your investments, and this is something that you can do yourself.
You do not have to depend on your broker to do it for you.
He will always tell you that it is not a good move.
He is a loser, and you don't have to be a loser too.
Take control of your funds and stay with the best ones.
Source...