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We'll show you how to get a better understanding of the markets and become a confident, competent investor. And we lay it all out for you in plain English (well, a Southern variety of English, anyway). Hey, you work hard for your money - learn how to make your money work hard for you!
Where Do We Go from Here?
Guns N’ Roses certainly didn’t have the stock market in mind when they blasted ‘Sweet Child O' Mine’ across the airways back in 1987, but the last lines of that song surely ring in the minds of investors today. With this 9-year bull market sputtering a bit, everyone is wondering, “Where do we go now?”
As usual there are plenty of market gurus out there with plenty of market opinions, generally falling under one of three headings:
1. the stock market will move lower
2. the stock market will move sideways
3. the stock market will move higher
You’ve seen them on TV. They dress nicely, speak eloquently and back up their opinions with some impressive-sounding statistics. Each and every one of them are completely believable and convincing, but only a third of them will be right. Good luck choosing the right one to follow…
So, if the big boys can’t call the market correctly, how are us novice investors supposed to? Simple: we don’t. As trend followers, we don’t call the market, we react to it. The essence of trend following is following - not anticipating, not guessing, not calling market direction.
Trend followers watch their long-term charts to identify major trends and align their portfolios accordingly. While these charts don’t really have much ‘predictive power’, they can give us some clues as to future market direction - at least enough so Old Mr. Market doesn’t surprise us! What are the charts telling us trend followers right now?
At the time of this post (5/1/18), the S&P 500 is still in a long-term uptrend, despite the recent wild price swings. Pullbacks and corrections happen all the time in bull markets and we are in the middle of one right now. Prices had that big drop in February, recovered a bit and have been moving sideways for the last few weeks.
Bottom line? With no clear market direction on the charts right now, trend followers would give the benefit of the doubt to the bulls and expect this uptrend to resume at some point, but they would surely keep a keen eye on their charts for any changes!
Is trend following right 100% of the time? No. There’s not an investment strategy around that is right 100% of the time. But trend followers can quickly see if they are on the ‘right side’ of the market and adjust their portfolios accordingly - without having to wonder where do we go from here!
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NEWS YOU CAN USE
"Goldman Sachs Executive Charged in Insider-Trading Scheme" from Bloomberg
"Fidelity, Bruised from Crises, Searches for
Life After Mutual Funds"
from NY Times
"Calpers Considers Following Buffett's Way"
from The Wall Street Journal
"Active Share Scores:
Easy to Understand, Hard to Interpret"
"InvestNet Embraces Alexa, Insurance Products"
VIEWS YOU CAN USE
"How the Bond Market Reliably Signals Recessions"
"Money is Flowing into Passively Managed Bond Funds" from CNBC
"Trends Within a Trend: Is this Market in a Super Cycle?" from The Economic Times
"Warren Buffett: Target-Date Funds Aren't the Way to Go" from Yahoo Finance
"Are You Ready to Start Investing?"
from The Motley Fool
Spring Reading List 2018
Spring is the time for new beginnings! If you're just beginning to learn about the markets and investing, here are 4 great books to get you going!!
Hey, it's your money!!!
>>>>> And just so you know:
Clicking on these book images takes you to Amazon.com via our affiliate link. You won't pay a penny more for what you buy, but we do get a few coins for sending you there - and that helps us cover the costs of keeping our website running free!
Here are a couple of very simple retirement calculators courtesy of our friends over at Calculator Pro.
Here are the figures we used:
> Required Annual Income: we put in what we're making now (we don't buy into that "plan to spend 70% of your working income in retirement" idea!)
> Years until Retirement: we shot for age 65, but who really knows, right?
> Years after Retirement: we sure hope to have 20 good years of doing what we want to do!
> Annual Inflation: we used 3.5% (maybe go a tad higher to be safe?)
> Annual Return on Balance: we used 7% (maybe go a tad lower to be safe?)