Buy Low - Sell High

Now where have got I heard that before? I know. It was my broker.

So I took his advice and bought some of the pillory he recommended. I am still waiting for the 'sell high' portion of the equation. Everything he touted went up for a piece and now it is lower than when I bought it. It is so low Iodine can't convey myself to sell it. My capital have shrunk about 60% from where I started. That's a batch of money to me because it took a long clip to salvage it. What happened?

The brokerage company that your broker plant for put option out recommendations almost very hebdomad for assorted companies listed on the major stock exchanges. They have got simple things like Buy or Strong Buy. Then they have got a complex grouping of words used when they downgrade a stock. It never travels from Buy to Sell. No, it goes Accumulate, Underperform, Attractive, Market Perform, Neutral or some other meaningless term. If any stock is ever downgraded even one notch sell it immediately. Finally after a stock have lost 50% Oregon more than of its value it goes a 'Hold". And you cognize where you are holding it.

Last twelvemonth the brokerage companies gave over 33,000 stock recommendations to their customers. Of those lone 125 were Sell. On the NASDAQ exchange alone there were over 1,000 pillory that lost more than than 90% of their value. The "experts", known as analysts, were all revealing you to buy. Your child could have got thrown a dart at the Wall Street Diary in 1999 and done as good a occupation as almost any analyst. What I desire to cognize (and I believe you make too) is if they were smart adequate to state you to purchase then why weren't they able to state you to sell?

I'll state you why. Brokerage companies never give sell signalings because they don't desire to pique a company that mightiness come up out with a public offering on which they will do a killing. It is better to kill a few clients than lose out on respective million dollars. You pay committee and inquire for honorable advice, but you are being Federal disinformation.

Is there any manner you can protect yourself from this nonsense? Yes! It is called a stop-loss order. Brokers don't like them because then they have got to watch your account. He will state you you don't need it as he will watch your account. And hogs can fly. The average broker have got 300 accounts and unless you have a large 6-figure account you will be on the underside of the pile.

Anyone can put a protective unfastened stop-loss order for stocks. Most are about 8% to 15% below the highest shutting price. I urge that each Saturday morning time time you look in the paper for the Friday shutting terms of your stock and topographic point your unfastened halt each Monday morning with the broker. As your stock moves up maintain raising the halt and you will sell near the high. Never lower it. This volition lock in your net income or take you out of a losing position. I can guarantee you your broker will never name you to sell. Brokers are not taught to protect your capital.

This is the lone manner to purchase low, sell high, protect your capital and lock in your profits.