Wednesday , 25 December 2024

Strategies

A Moving Average Strategy Ensures Participation In Most Upside Moves & Dramatically Reduces Losses

Buying and selling based on a moving average of monthly closes can be an effective strategy for managing the risk of severe loss from major bear markets. In essence, •when the monthly close of the index is above the moving average value, you hold the index, •when the index closes below, you move to cash. A chart of the S&P 500 monthly closes since 1995 shows that a 10- or 12-month simple moving average (SMA) strategy would have ensured participation in most of the upside price movement while dramatically reducing losses.

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3 Ways To Deal With Rising Stock Market Volatility

What makes 2018 remarkably different from the recent past is rising stock market volatility. Since the start of the year, the CBOE Volatility Index (^VIX) has shot higher by around 100%. By comparison, the VIX was -42.5% for the three-year period from January 2015 to December 2017. While rising volatility might put certain people on edge, but it’s not necessarily bad. Here are 3 strategies for managing market volatility.

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Common Trading Mistakes Investors Must Avoid

For the majority of Americans, investing has never worked as promised. The problem is that most individuals cannot manage their own money because of ‘short-termism.’ Despite their inherent belief that they are long-term investors, they are consistently swept up in the short-term movements of the market. Fear is a stronger emotion than greed. People sell out, usually at the very bottom, and almost always at a loss. Let’s look at some of the more common trading mistakes to which people are prone.

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Put Your Money On Steroids By Dollar Cost Averaging Into SPY – Here’s Why (+2K Views)

Life is like going the wrong way on a moving escalator. Walk and you stay put. Stand still and you go backwards. To get ahead, you have to hustle or, at least, your money has to hustle. You have to make your money make you money and dollar cost averaging as an investment strategy is like steroids for your money. The difference between doing it and not doing it is millions of dollars.

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Averaging Down: Bad Strategy?

Whenever some financial “pundit” says that the best way to get into a stock is by averaging down, we sometimes cringe. Why? Because, at best, you’ll be getting into a stock at a lower average price...but more importantly, you can be getting into a stock that’s poised to sink much, much lower and that’s a risk no one wants to take.

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Should You Sell Your Losing Stocks?

What do you do with your losing stocks? Unfortunately, many of us probably hold onto them, afraid to admit our failure with the hope that one-day they’ll come back. In this article, I’ll try to explain why it might make sense to sell them.

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