Buy and Hold Investing Is Dead: Why Small Caps Work for Active Traders

I recently had the opportunity to get to know Ian Wyatt from SmallCapInvestor.com, and his small-cap (and overall market) knowledge is outstanding! He's written the below article just for Trader's Blog readers, and per my request has made a special offer to those interested in learning more about small-cap stocks. Please feel free to comment with questions, opinions, and insight!

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Conventional wisdom told investors that buying great companies at any price and holding them to eternity was the surefire way to growing a college or retirement fund. After all, during a secular bull market like that experienced from 1982 through 2000, when the Dow soared 1,409%, is was an indisputable strategy for almost guaranteed profits.

However, the days of “buy and hold” profits are now a distant, but fond memory. With the end of the century came the end of the 18-year secular bull market, the greatest creator of wealth in the last hundred years.

So today we enter a period of volatility where successful investors will be those who are willing to buy and sell stocks, turning the average investor into an active trader. MarketClub Trader’s Blog readers certainly know that the way to reap profits in this market is through buying and selling, not buying and holding.

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"As California goes, so goes the nation"...Let's hope not!!

There's a  saying that most of us have heard many times before, "As California goes, so goes the nation." The saying is/was intended to recognize Californians for consistently being on the cutting edge of new developments in science, business and innovation.

Let's hope that the current dire unemployment picture in California doesn't end up sweeping the rest of the nation.

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This graphic courtesy of the Los  Angeles Times. Full article here.

The Calm Before the Inflationary Storm

We ALL worry about inflation, but then the news dies down a bit and we push in another 'major issue' according to the news media. Funny how they can easily munipulate the masses with their massive hype machine...anyway when inflation was hot Tim McMahon, editor of InflationData.com, was busier then anyone on the planet! I've asked him to enlighten us on the inflationary storm...please enjoy the article, comment below, and visit InflationData.com for more info.

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I must be getting old.  Things seem to change awfully quickly.  It seems like just yesterday that gasoline was well over $4.00 a gallon and inflation was 5.6%.   It was July 2008 and inflation was the hot topic, everyone was worried about costs climbing exponentially.  It seemed like every time I went to the store things cost more.  Oil was a speculator’s dream and a car owner’s nightmare.

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5 Simple Things All Wealthy Traders Do To Gain An Edge

At one point I considered myself the luckiest person in the trading world because I was surrounded by trading experts, and had instant access to almost anyone. I lost that title after I met Tim Bourquin, Co-Founder of TraderInterviews.com. See Tim has the platform to basically ask ANY question he wants to ANY trader he wants...and he records it for his future use. Thankfully he opened his records for people like you and I to learn from and in this article he teaches us 5 things that he's learned from the hundreds of experts he's interviewed. Enjoy the article, comment below, and take time to visit TraderInterviews.com.

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Over the past year I’ve spoken to hundreds of traders, many of which were recorded and posted at TraderInterviews.com.  If you had asked me a few years ago how the best traders approached the markets, I would have said that they all had similar strategies.  But after talking with traders of every market imaginable, I’ve found they all have very different methods.

However, while they each may use wildly different techniques (I spoke with one very wealthy trader who confirmed his chart patterns by looking at planetary movement and moon phases), all of them follow five rules without exception.   Some of them make hundreds of thousands – even millions – of dollars each trading their own account.  These aren’t your typical “always use a hard stop loss” type of rules .  These are actual guidelines successful traders follow religiously.

In fact, I’d bet that deep down you know you should be following these rules as well but you aren’t – yet.  Today is the day you can commit to doing what works for other wealthy traders and get on that same path.

Let’s get started.

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