Maintain your old Siemens Hipath system

Parachute Investing

Ever jumped out of an airplane? It's OK if you have on a parachute. Pretty dumb if you don't.

Every buy any stocks, mutual funds or Exchange Traded Funds? It's OK if you know how much you are willing to risk. Pretty dumb if you don't.

Parachute investing is buying an equity with a parachute so you won't risk all your money or, better yet, give back the profit you have made as the stock or fund went up and then goes down. If you bought that hummer at $12 per share and during the past couple of years seen it go up to $52 you don't want to give back that nice profit, do you? With a parachute you can save most of it. How?

When you invest in any stock of fund you must know how much you will risk before you buy it and how much of the profit you are willing to give back when it turns down. Take that beauty at $12. Instead of going up it went down. Are you willing to agonize as it drops to $5? If you had a parachute you would have jumped out of the plane before it crashed. If you had an exit strategy for your stock you would have sold it before you lost a big chunk of your cash.

The secret of a safe investment is an exit strategy. When you bought Mr. Twelve Dollars you shook hands and told him I'd like to be your friend, but if you change your name to Ten Dollars I am leaving. Maybe that that is not very nice, but nice doesn't cut it in the investment world.

Mr. Twelve Dollars said I am going up and I want you for my friend. Please follow me and if I falter you can leave and we will part friends. Now that makes sense. You trail along and after it goes to $52 it does falter. Do you know where you are going to leave or are you going to ride it go back down to $12? In other words do you have your parachute on?

That parachute is your continuing exit strategy that is in place every day. In the investment community it is called an open trailing stop loss order. Any broker can put this in place for you. You might be lucky enough to have a broker who knows where to place stops, but unfortunately there are not many of them.

The brokerage industry does not teach its employees (brokers) how to protect customers' money. If that is the case you might want to use the old standard 10% rule. Have the broker place an open stop every Friday at 10% of the closing price of that day as it closes higher. Never lower the stop loss. Brokers hate this as it makes them work, but that is what they are there for and that is how they earn their commissions.

With your parachute you can always protect your original cash purchase from a big loss and as your stock advances you can lock in profit as the stock advances.

Every investment should have a parachute.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. 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 2005

In The News:

India: Police fire tear gas in rallies against citizenship law
Sun, 15 Dec 2019 14:52:00 +0000
Police in India have fired tear gas at hundreds of Delhi protesters venting their anger against a new citizenship law.

British man shot dead in Argentina robbery is named
Sun, 15 Dec 2019 15:06:00 +0000
A British man shot dead during an armed robbery in Buenos Aires is understood to be Matthew Gibbard.

Greta Thunberg tackled over 'overcrowded' train tweet
Sun, 15 Dec 2019 16:01:00 +0000
Climate campaigner Greta Thunberg has been taken to task by the German railway after tweeting a photo of herself sitting on the floor of a train surrounded by lots of bags.

Italian city evacuates 54,000 people over unexploded WW2 bomb
Sun, 15 Dec 2019 16:41:00 +0000
Around 54,000 people were evacuated from an Italian city as experts worked to defuse a British Second World War bomb, authorities have said.

Madrid climate change talks end without deal on key carbon targets
Sun, 15 Dec 2019 11:37:00 +0000
International climate talks that have gone on for two weeks have failed to reach an agreement on a key part of a deal that would help reduce global carbon emissions.



tikatoshop.it

Erfahrungen mit Pallhuber Wein
Agen Bola SBOBET Terpercaya

Travel in comfort and at your leisure with CT Airlink Limousine & Car Service for top quality private transportation and exceptional customer service. We operate Sedans, SUVs & Vans for CT Car Services to covering all Connecticut airports including Car Service from CT to Newark Airport , Mohegan Casino Uncasville CT, Foxwoods Casino Mashantucket CT, Manhattan Cruise Terminal NYC, Brooklyn Cruise Terminal NYC and Bayonne Cruise Terminal NJ. CT Airlink hire licensed and friendly chauffeurs who have in-depth knowledge of the Areas.

Stock Valuation using the SMP Model

Disclaimer: Please note that I do not necessarily purchase, own,... Read More

The Stock Market is a Roller Coaster: Prepare for the Ups and Downs

IT'S REMINISCENT OF THE OLD children's tale about an old... Read More

Hot Stock Trader: How to Pick Momentum Stocks with Ease and Simplicity

Most stock traders know that momentum trading can be a... Read More

Market Globalization

Just 30 years ago the stock market was a shadow... Read More

Stock Chart Reading

As an investor you will want to check out any... Read More

The Bottom?

Every day I hear someone on CNBC proclaim that "this... Read More

How to Pay Less and Get More: Discount Broker vs Professional

How do you invest? What do you really pay? At... Read More

Trading Tips No 8: Picking the Best Stock Market Price

Carefully thinking through your goal as a trader is of... Read More

A Triple Dipper: How to Make 3 Profits on 1 Stock Trade

This is a rather simple strategy with which I am... Read More

It Cant Be Done

Wouldn't it be nice if you were only in the... Read More

Buying Stocks and the Importance of Correct Timing

An investor can find and research the best stock on... Read More

The Stock Market Investor?s Worst Enemy

Every stock market investor faces one primal enemy. An enemy... Read More

Its A Duck

If it walks like a duck, quacks like a duck... Read More

What Can Model Airplanes Teach You About Trading?

I was devastated!I just couldn't believe it. I was 10... Read More

Why Stock Is More Risky Than Options!

You probably have been told that options are risky. Even... Read More

Mutual Fund Ball and Chain

The broker told me not to sell because the mutual... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More

Overseas Investing: Going Against the Mainstream

TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More

Political Investing

We have two candidates for president that have really different... Read More

Analysts - Do They Really Know The Stock Market?

When you become interested in a stock or mutual fund... Read More

Making Outsized Returns in the Stock Market - Using the Dow Theory

The Dow TheoryCharles H. Dow... Read More

The Shadow

The Shadow knows. There used to be a radio program... Read More

Chart Reading

As an investor you will want to check out any... Read More

Where Is The Rabbit?

We need a rabbit!This was a pretty horrible week for... Read More

Pamplona, the Wild Investment Bulls

You remember (they show it on TV every year) the... Read More