"Wrestling is ballet with violence."Jesse Ventura
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Financial Planners! How Do You Tell The Difference?
First Published Fall 1993 Eight years ago I was discussing a Financial Planning recommendation with a Judge. He made the comment that he was reluctant to accept recommendations from a 'Financial Planner' because he knew of a lawyer in Vancouver who had ...
Home Based Business Opportunity: Secrets Of Success In Home Based Business Opportunity, Exposed
Do you have a home based business opportunity or program?Are you doing any affiliate program?What type of home based business opportunity are you doing?Are you a shining success in the home business opportunity that you're doing? Are you making enough ...
The Best Of Stock Market Simulation Games
A stock market simulation game is a great way to practice your investment skills before actually investing any "real" money in the stock market. Simulation games are usually played on the internet, where people can experience the thrill of investing in ...
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...unless the stocks you own ARE beating the market!
There is no way on earth you could ever beat the market if the stocks you hold are not keeping up with the market. And hopefully, staying ahead of the market.
But yet, that's what lots of people try to do. They'd rather keep all the dogs in their account and maybe “take a flyer” on one stock, hoping for a miracle. It's like trying to win a NASCAR race with your Ford Taurus. It just ain't gonna happen.
But hey, maybe you don't want to beat the market overall. Maybe you just want to own the BEST semiconductor stocks, or the best retailers, or the best utilities.
Seriously, how would you even KNOW if your stocks or mutual funds are beating the market, or are the best names to own in their group? Well, I can tell you this...
the best indicator I've ever seen in twenty-plus years in the business has been relative strength.
What is relative strength? It is simply the measure of how your mutual fund or stock is doing, compared to a group of other stocks, funds or indexes...or the market overall.
Perhaps you want to compare Intel with other semiconductor stocks. Maybe you want to compare Microsoft with the S&P 500 Index. Maybe you want to compare your mutual fund against the Dow Jones Industrial Average or the Standard & Poor's 500 Index.
This is a very easy calculation. Here is how you do it: Simply divide the price of your stock or mutual fund against whatever yardstick you choose. You'll get a fractional number as the result. But slide the decimal over so you can work with whole numbers. Then we begin plotting that result daily on a point & figure chart.
These relative strength charts move much slower than a typical chart. Anything going up over time will be in a column of X's. Anything going down will be in a column of O's. If you want to significantly improve your chances of beating the market, the index (or whatever yardstick you choose), it MUST be in a column of X's and preferably be giving buy signals.
Why is this so? Well, if your stock or mutual fund is climbing in a column of X's against the market (or a group of its peers), it HAS to be outperforming the yardstick, right? It cannot go higher unless it is rising faster than the market overall.
Now, if your stock or mutual fund is going down against the yardstick you are using, it means your stock or mutual fund has poor relative strength compared to the index you are plotting it against.
Poor relative strength is something to be avoided.
Here's why: When the market starts falling apart and things look bad, stocks and mutual funds with poor relative strength (or on a relative strength SELL signal) will usually fall further, faster than the rest of the market.
Now, stocks on a relative strength BUY signal can also fall with the market. But our experience has shown that stocks with good relative strength (or on relative strength buy signals) usually don't fall as far as the market overall. They are also are the first names to bounce when the market recovers.
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7 Stocks Rising on Monster VolumeTheStreet.com(Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Many times when above average volume moves into equity it precedes a large spike in ... |
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