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The stock market has been going up for the
last three years. Are you rich yet? What most
investors fail to remember is not how much you made,
but how much of what you made you keep.

There were thousands of paper millionaires in
2000 who are wishing they had known when to sell at
that time. Of course, hind sight is always 20/20. Is
there any method that could have been employed that
would have given an investor a chance to keep most of
his money? Yes, but even if your broker had known
about it his brokerage firm would discourage telling
you.

If you had known and told your broker he would
have pooh-poohed the idea and if his boss found out
he was encouraging his clients to follow the method
he probably would have been fired. It is a simple exit
strategy used by all prudent investors during bear
markets.

There are two ways to keep your money.

A simple trailing open stop loss order is easy, but
requires your attention on a regular basis. You must
first decide how much you are willing to risk. Many
professional traders recommend 10%, but depending
upon market conditions and type of equity it could be
more or less. When in doubt 10% is a good number.

Another very excellent equity-protector is a
simple moving average. The shorter the time frame
the quicker a position will be exited. Also many
stocks have a history of violent ups and downs. For
the non-professional it is best to invest in
no-load mutual funds and use a longer time
period simple moving average.

Even a simple moving average must be mastered.
Many texts on technical trading speak of action when
the line is penetrated, but experience will teach
the direction of the line is the key to the
greatest profits.

A long-term 200-day moving average line used
for mutual funds keeps the investor in the position
as the line is ascending. When the line turns down
the investor sells. The 200 line for mutual funds
is not affected by the daily movements of the stocks
within the fund,

Observation will prove that once a trend is in
place either up or down it will last for a considerable
period of time ?usually years. During these down
periods the investor does not give back previous profits.
That is the key to becoming wealthy with equities.

In recent years many smart investors have
discovered bear mutual funds. These are very special
funds that move in the opposite direction of the general
stock market. 401K-type plans do not allow
short selling, but do allow purchase of this type of
mutual fund. Now the investor can make money while
the market is going down as well as up.

Brokers will not help you with this plan, but
it is your money. Unless you take charge you will never
be able to answer ?YES? to that important question.

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. Copyright 2006 All rights reserved.

Written By : Al Thomas