I have a question for you, when did you last gas up your car?
If you experienced the pain at the pump, plus sticker shock, you're not alone.
The pain at the pump is real, it's painful, and it's also affecting the daily pocketbook of millions of Americans who rely on the pump to get them to work. Now the bad news, there's no magic wand that any politician can wave to make all of this go away.
Here's the bottom line, the world runs on crude oil, and demand is likely to remain high in the foreseeable future.
It's not any one event that's causing oil prices to rise, it's a combination of several things. You only have to look at the value of the ever shrinking dollar, plus world wide demand for raw commodities, to understand why prices are moving higher.
Forget the pain at the pump, here's a way for you to profit from the pump.
Take a look at the latest video to come out of the MarketClub digital studios, to see how you can benefit. This6 minute video focuses on Crude Oil. See if it makes sense to you. I know this approach makes sense, because everyday we get calls and emails from traders like Milt in Virginia who tells us our approach works.
"When I started using the MarketClub, I checked out your signals versus the signals I generate for a few weeks. I used mine to verify yours… now I use yours to verify mine and the profits have been astounding!"
Milt Fall
Virginia ==============
Remember, we are not brokers, so we are not going to be asking you to open an account with us. We are trading educators, that's what we do best right after trading.
Now more than ever you need a plan to survive financially in what is turning out to be a very tough year for housing and the stock market.
Now more than ever you need a market proven, risk adverse formula for the future.
Now more than ever you need to be diligent, disciplined and follow a proven financial strategy.
Many people thought our Q3 and Q4 results were a fluke ... when we gave them a sneak peek for '08 at our gold trading results they were stunned.
I mean here it is, the world is coming to an end, right? The sky is falling in, and Humpty Dumpty has fallen off the wall. So what else can possibly happen to the economy, the markets and life as we know it?
No one knows for sure, but that's not the question.
The question is, how can you keep your boat afloat when everyone else's seems to be sinking fast?
Well making money in a stormy economy doesn't just happen by chance or luck. To make money, you must be prepared, and with preparation comes a game plan. This game plan has to be able to win in any market conditions.
Now don't get me wrong, there's a risk every time you buy or sell a stock or futures contract. If you are willing to accept a certain amount of calculated risk, in return for double or triple digit returns, read on, as that's our area of expertise.
In Q4 and early '08 we used the same market proven approach and game plan, that we used in Q3. Why change something that works? All the buy and sell signals were generated using MarketClub's "Trade Triangle" technology. The results for each market show just how well you can do when you follow MarketClub's easy to use, market driven "Trade Triangle" approach.
In times like these it pays to have a market proven, experience driven approach that gives you a professional traders edge over other investors.
Compare our Q4 results against Q3 (90 second video) and see how you can benefit from the proven MarketClub approach. Watch with our compliments. No registration required.
"The past is the teacher of the future" Old Hungarian Proverb
There is nothing new in the markets as financial history always repeats itself. The subject of todays blog posting is something you need more than ever in these volatile markets and that is money management.
In my previous blog postings we discussed diversification and stops. These two disciplines are all part of your money management suite of tools. But there are two other elements that make up a successful money management strategy in my opinion.
The two missing elements I am talking about are and the importance of usingFOCUS and DISCIPLINE.. You must have these two elements in your money management toolbox if you are going to succeed and make the kind of money that allows you to enjoy the good life.
Just imagine not having to worry about Fed actions, or stressing out about if some companies earnings is going to miss expectations.
Well, all that is possible with good money management. The tools we have discussed in our previous posts stops and diversification allow you the luxury of not worrying and stressing out over things you cannot control.
THE NUMBER ONE SECRET TO MONEY MANAGEMENT
All credit goes to the Oracle of Omaha, Warren Buffett for this secret. Mr Buffett who at 77 is a legend in the investment world. Here are Mr. Buffett two most important rules to investing.
Rule Number One: Never lose money.
Rule Number Two: Never forget Rule Number One.
If you follow this advice you will be very successful, perhaps like Mr. Buffett?
We were lucky enough to recently share some TV time with Mr. Buffett. You can watch it here.
Let's go back to our two topics today … FOCUS andDISCIPLINE.
Here's an example of FOCUS.
Say you are bullish on a certain stock or futures market. You need to FOCUS on three key components. 1. Entry price. 2. Trade risk. 3. Profit potential.
Here's an example of DISCIPLINE.
This is what I believe is the difference between winners and losers in the market.
It can be all summed up in one word DISCIPLINE!!!
Without DISCIPLINE the odds of being successful in the market are against you.
Here's a simple recap of the four basic components that make up your money management game plan.
Did you ever have your grandmother tell you not to put all of your eggs in one basket?
Well it turns out grandma was right. Grandma, knew a great deal about the power of diversification and how it reduces risk both in business and in trading.
IN BUSINESS …
What if McDonalds only sold hamburgers, do you think they would still be competitive when the world is turning to healthier lifestyles. Now don't get me wrong every once in a while I like to chow down on a nice juicy hamburger. But I also like to eat healthy and so do a great many other people. McDonalds moved with the times and diversified into chicken wraps, salads and a whole host of other healthier food groups. In other words they diversified.
IN TRADING …
It just doesn't make sense to trade just one market, there's just too much risk and too little opportunity in one market. A trader needs to stay flexible and at the same time be diversified.
Before we get into the meat and potatoes of market diversification let's take a look and see how the dictionary defines "diversification"
di·ver·si·fi·ca·tion
1. the act or process of diversifying; state of being diversified.
2. the act or practice of manufacturing a variety of products, investing in a variety of securities, selling a variety of merchandise, etc., so that a failure in or an economic slump affecting one of them will not be disastrous.
That's the official version of diversification. Now let's apply that to the markets. First off, we have to accept that the market can do only three things, it can go up, it can go down and it can go sideways.
Your portfolio on the other hand, can only move two ways. It can go up, or it can go down.
We all know the direction our portfolio should go, and we want to see it go in that direction with the least amount of risk. That's where diversification comes in. NUMBER ONE SECRET TO DIVERSIFICATION
Here is the number one secret to market diversification, spread the risk and trade in non correlating assets.
Here's an example of a non diversified portfolio.
Say you are bullish on Crude Oil and you buy a futures contract in crude, but what if the rest of your portfolio was full of energy stocks?
What you have created is one basket of eggs. In this case a basket of energy eggs. Your portfolio is dependent on one sector and that is energy. This is just too risky for the average investor. No matter how many stories you hear from the various experts saying that energy is going through the roof you don't bet the farm on one market … ever.
You need to have as many non correlating asset classes as you can follow. This short video illustrates diversification perfectly.
The other key to diversification is cash. You don't have to be in all the markets everyday. Cash is a way of diversify … Swiss Francs, Canadian Dollars, Euros, etc etc.
Here's an example of how a well diversified portfolio.
Stocks, bonds, futures and cash.
Out of those four asset classes, you have a multitude of choices. Stocks allow you to cover a broad spectrum of different domestic and international sectors. Bonds do the same thing, and the futures markets cover everything from raw commodities to financial instruments.
You can divide your portfolio into different percentages and allocate then to various asset classes. The more you divide into non correlated asset the less your risk will be.
Here's what I am suggesting. I call it the Will Rogers approach. Here Will Rogers was known for his famous quips.
"I'm more concerned about the return of my money than with the return on my money".
I guess Merrill Lynch should have remembered that when it had to write off 8.4 billion dollars and cause the firm to have it's first loss in 93 years. Diversification would have smoothed that disaster for Merrill, what got in their way was plain old fashioned greed.
The American humorist Will Rogers (1879 - 1935) had a special way of making a point. Here's another one of his insights about trading and investing.
"Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it". — Will Rogers
Will was right!
Only buy sectors when they are going up. When they turn down, get out and move into cash. Then look for another non correlating market sector for your portfolio that's moving up. For sophisticated traders you can even short different asset classes which is a way to turbo charge your returns.
Yes, it takes time to analyze the markets and find winners, but the time of a buy and hold strategy is gone forever.
We are living in extraordinary times, never before have we had so many people living on the planet. Never before have we had so many major countries competing for an ever shrinking supply of raw commodities. Never before have we seen times like this that present both great opportunity and great risk.
Diversify … spread your risk, don't be a Merrill. You can do well and thrive in the future with a well balanced and diversified portfolio.
On this Super Tuesday, I sense change is in the air ...
Change is an everyday part of our lives, to ignore change is often an expensive lesson that few can afford.
On this Super Tuesday, oh how the mighty have fallen.
If you thought I was just referring to Hillary Clinton, you would only be partially right.
Just look back a month or two, Ms. Clinton had a commanding lead in the polls and looked liked a shoe in to win the democratic nomination for president.
Now, lets take a look at another front runner, this one is in the stock market and not the political arena.
Google during this same time frame that Ms. Clinton looked unstoppable, was trading close to $750 dollars a share. By all accounts it seemed destined to reach $1,000!!
Both Clinton and Google are been challenged by powerful forces that are agents of change. On the political front it is Barack Obama, on the business front it is Microsoft.
One things for sure, Barack Obama represents change to a great many young people. Microsoft on the other hand is just so powerful and wealthy that it can buy and make change happen. Does anyone remember Netscape??? Well Netscape was the most popular web browser and used to commanded a market share close to 90%. Just like Google it to seemed unstoppable, unbeatable and at the top of its game. Enter Microsoft and within a few years Netscape was history, as it was purchased and absorbed into the AOL family and quickly fell into oblivion.
The point of this post is to illustrate that change can be a good thing and change always offers opportunities.
You can always learn new things and learn to profit from change.
One prediction I can make about the future that I know will be 100% correct is this ...
Are you ready?
Here's my prediction ... "Things change"
I have always believed that change equals opportunity. It's one of the lessons I learned early in life. You can learn about change here.
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The pain at the pump is real, it's painful, and it's also affecting the daily pocketbook of millions of Americans who rely on the pump to get them to work. Now the bad news, there's no magic wand that any politician can wave to make all of this go away.
Take a look at the latest video to come out of the MarketClub digital studios, to see how you can benefit. This 6 minute video focuses on Crude Oil. See if it makes sense to you. I know this approach makes sense, because everyday we get calls and emails from traders like Milt in Virginia who tells us our approach works.
Q3 results Video. Part 1
Did you ever have your grandmother tell you not to put all of your eggs in one basket?
the rest of your portfolio was full of energy stocks?
If you thought I was just referring to Hillary Clinton, you would only be partially right.
One things for sure, Barack Obama represents change to a great many young people. Microsoft on the other hand is just so powerful and wealthy that it can buy and make change happen. 