Forum Archive Index - September 2001

[Phaedrus <Phaedrus@techemail.com>]

  The current situation highlights some of the problems inherent in blindly 
following a "Buy and Hold" approach. Many people are forced to sit on the 
sidelines at a time when good buying opportunities are presenting themselves, 
because they have no money. Why? Because they have no selling strategy in 
place. No mechanism whereby they take profits, or limit losses. The worst 
aspect of this is not the capital erosion incurred by doggedly holding stocks 
through major retracements (though these can be substantial.) The worst aspect 
is the loss of opportunity and the frustration of not being able to buy sound 
stocks with good fundamentals at bargain prices, through lack of cash.
  Some of you may chose to attribute recent losses to the effects of the WTC 
tragedy. The writing was on the wall well before then, as can easily be seen on 
individual charts, as well as collectively - shown on the Dow chart below. I 
learnt many years ago to pay close attention to USA market movements - not just 
because I trade there, but because it is such a major influence on other 
markets. I regulate my degree of market exposure by means of simple technical 
analysis of appropriate indices. The chart shows what I did, when and why.
                      Phaedrus.

_____________________________________________________________
Are you a Techie? Get Your Free Tech Email Address Now! Visit 
http://www.TechEmail.com