Making Fortunes With Long-Term Value InvestingWritten by John B Keown
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at less than $3). Once additional criteria are met, look at charts for each stock. Look for a recent clear downtrend or new 52-week low. Put stocks with a most obvious downtrend onto a watch list. In particular watch those where downtrend also shows declining volume. Look at news for these stocks to see if there is an obvious reason for their recent poor performance. Do not buy - they could go down more. We don't want to try to catch bottom; it's a sure way to lose money. What we are watching for is a clear sign of a reversal and buy as stock moves up. Often a reversal can take place slowly and imperceptibly, other times it can be an abrupt reversal. Most often it is somewhere in between. Perhaps stock has been beaten down by investor sentiment in form of an overreaction to bad news. At some point bad news may be dispelled or proven to be unfounded, and stock will begin to return to fair value. Or, some good news may come in and stock reverses as investor sentiment comes in. Typically when this happens, we want to see downtrend broken convincingly and price rising on increasing volume. How do we know if downtrend has broken? Simply draw a line joining high points in downtrend, and wait for that line to be broken to upside with significant volume. What is significant volume? It depends. The higher volume better. Look for at least 150% of average daily volume. Once you have bought, set a stop loss order around 8-10% below where you bought. If at all possible, set stop loss order just below lowest low point before reversal, so long as it's not too far away from your entry. Spreading your risk can help minimize losses. Divide your equity into at least 10 lots; if you have $5,000 to invest only buy $500 worth of each stock and keep your stop loss 10% of that, or $50. If logical stop loss point is too far from your possible entry point, don't invest. Stick to rules and cut your losses short. Let your profits run. In long run you will make much more on winners than you lose on losers -- you can have 5 losers and still be down only $250 or 5% of your equity. Buying undervalued stocks with good fundamentals in this way at or near low points when nobody else has been interested for a while but there are signs of a reversal is possibly one of least risky investment techniques because of built-in "Margin Of Safety". (c) 2005 The Graham Investor - Intelligent Value Investing You may use this article, as-is, provided this copyright notice is kept intact.
John B. Keown is an IT specialist, website builder and private investor who enjoys all things stock-related and in particular seeking out undervalued stocks. He can be contacted via The Graham Investor - Intelligent Value Investing
| | Debt consolidation – Consolidate Your Student Loans Now!Written by Charles Essmeier
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currently vary, with fixed rates being slightly higher than adjustable rates. Those considering consolidation might wish to convert their loan to a fixed rate. Depending on amount of loan, borrowers may extend their loan terms to as long as 30 years.
There is also legislation pending in Congress that would change Federal loan system so that all future loans are adjustable rate, with no fixed rate option. This will save government money by not allowing students to lock in long-term loans at low rates during times of increasing interest rates. Students who wish to obtain a fixed rate loan may not have much longer to do so.
Rates will vary slightly from lender to lender, and market for loan consolidation is quite competitive. Those wishing to consolidate their loans should consider shopping around for best deal while time permits.
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and HomeEquityHelp.net, a site devoted to information regarding home equity loans.
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