By Al Thomas
Many months ago I wrote to my subscribers that I felt that the DOW 17000 was the objective for the stock market move. Well, here we are.
The "experts" in Washington and about 98% of economists think the economy is in good shape which means the stock market will go higher. Maybe. They don't say how much higher, of course. If you have read my book you know what I think of the '98%'.
The government is reporting unemployment at 6.1%. The real number is about 13%, probably more that now includes a huge number of part timers.
Those same geniuses say inflation is only about 2%. The shadow number is 6%. Geeze, how do they get 2%? Oh, they left out food and energy. Forget the cost of gas for your vehicle and electricity for your home or business.
But don't worry. Janet Yellin (you remember her, the head of the Federal Reserve) says, "I am creating extra money for everyone. I just turn the crank and another 100 million dollar bond pops out. Then I give it to the banks and they loan the money to you via your company as it expands and hires more of your neighbors." And pigs can fly.
Yes, the Fed is creating new money with only paper and ink, but where is it going? With short term Treasury Bills paying a fraction above ZERO PERCENT people are being forced to try to pick winners in the stock market.
Folks, I have been trading for decades and I will tell you it is NOT easy to pick winners. Furthermore, stay away from mutual funds unless you check out what that fund did in 2008.
Professional traders know the secret of the market. It isn't buying; it is knowing when to SELL. Without an exit strategy the investor will never make money in the stock market.
Every broker will say you can't time the market. That is a flat out lie. You better learn or you will die broke.
The stock market is being forced up. This is the magician who wants you to watch his right hand while he manipulates what is really happening with his left. The investor must keep an eye on his money.
The best way to do that is with an Open Stop Loss Order. You will need to determine how much risk you are willing to take - 10% - 15% - 20%. When your equity drops to that level you don't want to hit the snooze botton. You want to run for the exit with your money.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!", 3rd edition, has helped thousands of people make money and keep their profits with his simple 2-step method. The method made 10% during 2008. 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 2014 Williamsburg Investment Co. All rights reserved.