By Al Thomas

Have you had one of those huge investment winners – a stock that went from $2.00 to $80.00? Or any other numbers you want that gave you a gigantic percentage in profits?

Did you take the profit or did you watch the equity drop back down to what you paid for it? I hope you sold and kept the money. That’s what it is all about. When I was a broker, I have often seen customers make large profits, think they were omniscient about trading and within a short period give back what they had made.

As a brokerage company owner, I had seasoned brokers do the sane thing. One of my men made $150,000 in a short time. I called to congratulate his performance and suggested he take a vacation from trading for a while. He said, “No, Al, I know what I am doing”. The very next month he lost $155,000. What happened? Read the rest of this entry »

The Moving Average Convergence Divergence charts, MACD charts for short, are technical indicators that are derived from the more simple moving average.

The MACD charts are oscillating indicators, meaning that they move above and below a centerline or zero point. As with other oscillating and momentum indicators, a very high value indicates that the stock is overbought and will likely drop soon. Conversely, a consistently low value indicates that the stock is oversold and is likely to climb.

THE 12-DAY AND 26-DAY EMAS

The MACD charts are based on 3 exponential moving averages, or EMA. These averages can be of any period, though the most common combination, and the one we will focus on, are the 12-26-9 MACD charts. Read the rest of this entry »

1. OMITTING APPROPRIATE ASSET CLASSES AND ASSET SUBCLASSES. Numerous landmark studies have concluded that how you allocate your portfolio, rather than which investments you select or when you buy or sell them, determines the majority of your investment performance over time. As a result, make every effort to allocate your portfolio to all appropriate asset classes and asset subclasses.

2. SELECTING INAPPROPRIATE ASSET CLASS WEIGHTINGS. By selecting inappropriate asset class weightings a portfolio may earn a lower return and experience greater risk than expected. Consequently, be careful not to over or under weight any asset class, thus enhancing your portfolio’s risk and return trade-off profile.

3. UNDERESTIMATING THE IMPACT OF INFLATION. Inflation can erode the real value of your portfolio over time, thus placing your future financial security at risk. As a general rule, the longer your investment time horizon, the more you should allocate to equity investments. For shorter investment time horizons, emphasize fixed-income and cash and equivalent investments. Read the rest of this entry »

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!