VooDoo Training for the Stock Market

If you go to Haiti or other places in the Caribbean, you may come across the magical tradition of voodoo. There are long and mostly noisy rituals in which the sorcerer utters words that bring great power and conjure up whatever the supplicant desires. Large amounts of smoke and mirrors.

Does this remind you of something?

I listen to the fascinating words of my runner telling me about a wonderful action. It produces multicolored charts and graphs that dazzle my eyes. His song is “BUY, BUY, BUY.” I can’t resist. He has me under his spell. Hence the magic of Wall Street. Large amounts of smoke and mirrors.

Brokerage firms and mutual funds only want you to do one thing: BUY and HOLD. Never sell.

To escape the clutches of these magicians you must start thinking for yourself. I am sure you realize that for the last 3 years you have been losing money. The recent rally has repaid some of her losses and Maul Street wants her to hold out as the rest of her money will be returned to him. Maybe. If the runner (magician) keeps doing what he has been doing, he will get more of the same results. If she has lost 30-50% of her savings over the last 3 years, don’t you think she would do just fine without the “help” of a broker or financial planner?

OK. No more brightly colored folders (smoke and mirrors) about how wonderful a company is. If you know it, then so does everyone else. This kind of ‘investigation’ is worthless. Leave that to mutual fund managers. It seems to be what they do best, or is it the worst?

Wall Street preaches the lie that if you hold you’ll make money, but that’s only half the story. You have to be able to sustain for 30 years. Oh, did they forget to tell you that?

The most important thing in the stock market is not to buy, it is to sell. Did you realize that about 40% of the S&P500 index changes every 10 years? Mr. Standard and Mr. Poor realize you can’t hang on to a loser, so they dump the weak ones and replace them with stocks that are going up.

You want to be in the market when it goes up, not when it goes down. You have to know when the market goes up and that is called market timing. This is not about cheating with late trades; is to understand that the long-term trend is up (or down) and you want to own funds at that point (or be out of the market entirely). A broker or financial planner won’t help you, but it’s very easy to learn. Go to the search engine called http://www.Google.com and type market timing. You will be inundated with information.

You need to get out of the Buy and Hold voodoo spell as he is a guaranteed loser.