I just recently opened an acct and was looking to make a few stock purchases. I have about $10000 to spend and can leave it in there for a while. I wondering if any of you guys had any good ideas as to what stocks to look into. So far I have looked at General Electric (GE), Coca-Cola (KO), Dick's Sporting Goods (DKS) and Best Buy (BBY) just to have some stock in these companies for long term potential since they are all down. I also looked at JOE (St. Joe Real Estate Company) but didn't know if buying in real estate was a good idea even if you know it will rebound. Any help would be appreciated. Thanks
Put it all in VMPXX or FDLXX.
Follow a 20 yr, weekly chart of the SPX with two Simple Moving Averages; one 20 weeks, the second 50 weeks. When the 20 week gets back above the 50 week by 1%, get back into the market. Do a 70/30 split with your money between both a S&P 500 and Russel 2000 ETF/Mutual Fund.
Always check your S&P chart on Mondays, if the 20 ever gets 1% below the 50 again, sell everything and get back to cash.
Follow a 20 yr, weekly chart of the SPX with two Simple Moving Averages; one 20 weeks, the second 50 weeks. When the 20 week gets back above the 50 week by 1%, get back into the market. Do a 70/30 split with your money between both a S&P 500 and Russel 2000 ETF/Mutual Fund.
Always check your S&P chart on Mondays, if the 20 ever gets 1% below the 50 again, sell everything and get back to cash.
I was not trying to be confusing.
My first recommendation is to get into a safe cash account hence the 2 Treasury backed mutual funds. If your broker doesn't offer that look for a short term Treasury ETF.
The second was an attempt at describing how to figure out when to get into the market. Personally I think that with the volatility right now you are better positioned in cash for when the upward trend finally re-emerges. My long term positions are situated in just such a way; when the signal I described came about I went to all cash and have added any new funds to this position. I will re enter the market when this signal shows itself again. For someone who is a novice I was recommending 2 index ETFs/Mutual funds, 70% in a S&P500 and 30% in Russel 2000.
I also recommend spending a lot of time at http://www.investopedia.com/ learning the basics and fundamentals of investing.
Now the signal I was describing is one I learned a long time ago from a real pro. It will help you move in and out of the market before serious downturns and back in when an uptrend has re-established itself. The 1% rule prevents any wild bouncing around between positions (cash and all in).
Go to your favorite (or soon to be favorite) charting site. Open a chart on SPX (S&P500). Make the time frame 20 years. Make the intervals weekly. In the upper indicator section create two simple moving average lines; one 20 weeks, one 50 weeks. When these lines cross by more than 1% you either move into the market or move out and into cash. When the 20 goes above the 50 get in, when it goes below the 50 get out. Right now we have the 20 below the 50 so you should be out. This signal doesn't happen often so you will not be jumping in and out all willy-nilly.
My first recommendation is to get into a safe cash account hence the 2 Treasury backed mutual funds. If your broker doesn't offer that look for a short term Treasury ETF.
The second was an attempt at describing how to figure out when to get into the market. Personally I think that with the volatility right now you are better positioned in cash for when the upward trend finally re-emerges. My long term positions are situated in just such a way; when the signal I described came about I went to all cash and have added any new funds to this position. I will re enter the market when this signal shows itself again. For someone who is a novice I was recommending 2 index ETFs/Mutual funds, 70% in a S&P500 and 30% in Russel 2000.
I also recommend spending a lot of time at http://www.investopedia.com/ learning the basics and fundamentals of investing.
Now the signal I was describing is one I learned a long time ago from a real pro. It will help you move in and out of the market before serious downturns and back in when an uptrend has re-established itself. The 1% rule prevents any wild bouncing around between positions (cash and all in).
Go to your favorite (or soon to be favorite) charting site. Open a chart on SPX (S&P500). Make the time frame 20 years. Make the intervals weekly. In the upper indicator section create two simple moving average lines; one 20 weeks, one 50 weeks. When these lines cross by more than 1% you either move into the market or move out and into cash. When the 20 goes above the 50 get in, when it goes below the 50 get out. Right now we have the 20 below the 50 so you should be out. This signal doesn't happen often so you will not be jumping in and out all willy-nilly.
And what is terrible?
Telling a rookie to go to cash during one of the most volatile markets while they learn what they are doing?
Telling a novice (which I assumed meant they were young) to get into the market, at the right time, with an all equity stake in low cost investment vehicles?
Or are you calling the timing signal I talked about terrible? That must have been an off the cuff remark then because if you checked a chart you would see what I was speaking of. The 2 people who listened to me in Jan of '01 didn't think it was so terrible. Nor the family and friends who got crushed in that bear market and decided to listen to me in Feb of '08. How have your investments done since February of this year? The mantra in a Bear market is return OF capital not return ON capital. I have many people in the retail side of the business as friends and when they hear this they react as you do. Most advisers aren't trained to handle bear markets other than to expose the benefits of regular investments and dollar cost averaging. When this one finally ends I will still have a 401k and IRA with funds ready to invest meanwhile they will be looking at a smoking crater on their 201k statements wondering how long it will be before they get even again.
20 Year chart
20 year chart zoomed in for the last 2 downturns.
Sorry for the size but I wanted you to be able to see the labels.
Telling a rookie to go to cash during one of the most volatile markets while they learn what they are doing?
Telling a novice (which I assumed meant they were young) to get into the market, at the right time, with an all equity stake in low cost investment vehicles?
Or are you calling the timing signal I talked about terrible? That must have been an off the cuff remark then because if you checked a chart you would see what I was speaking of. The 2 people who listened to me in Jan of '01 didn't think it was so terrible. Nor the family and friends who got crushed in that bear market and decided to listen to me in Feb of '08. How have your investments done since February of this year? The mantra in a Bear market is return OF capital not return ON capital. I have many people in the retail side of the business as friends and when they hear this they react as you do. Most advisers aren't trained to handle bear markets other than to expose the benefits of regular investments and dollar cost averaging. When this one finally ends I will still have a 401k and IRA with funds ready to invest meanwhile they will be looking at a smoking crater on their 201k statements wondering how long it will be before they get even again.
20 Year chart
20 year chart zoomed in for the last 2 downturns.
Sorry for the size but I wanted you to be able to see the labels.
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You present some good information there desrat, but the problem i have is with investing ALL the money into one of these 2 funds. is it safer than the current securities market? probably, especially for a rookie investor. i do not recommend him getting into the market right now with no knowledge, but there is some good opportunities right now. Instead of just choosing one of these funds, i would suggest to spread it out over a few several funds, especially for a novice. I personally do not like the idea of investing in BOTH treasuries, but to each his own. I prefer to take a slightly more risky route. You do provide some good insight however, as i am just reading your post that was previous to mine. I apologize for coming off harsh, we just have slightly different views
