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Q&A

The Curse of Preconceived Notions

November 2, 2008
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Here’s another question I received recently. Again, feel free send us any questions you have and keep checking back to see them get answered. Question: Given your trend-following indicators, you’re not likely to get a buy signal for a few weeks after the bottom.  But considering the horrible news, the rally is likely to top around then!  How will you prevent your indicators from giving a buy signal at the top of a rally? Answer: Whoa!  This is what I call the curse of preconceived notions.  First, no one knows whether the next rally will be a bear market...

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Has the Market Re-tested its Lows?

November 1, 2008
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Here’s another question I received recently. Again, feel free send us any questions you have and keep checking back to see them get answered. Question: You’ve been looking for a re-test of the market’s lows.  Does last week’s decline, followed by this Tuesday’s 889-point Dow upmove, qualify? Answer: Historically, every major market bottom has a re-test–that is, the Dow hits a low, rallies for a couple of weeks, and then falls back down to test the level of the initial low.  If the low holds, then there’s a chance the market will see a big rally … sometimes a...

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A Good Time for Dividends?

October 31, 2008
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Here’s another question I received recently. Again, feel free send us any questions you have and keep checking back to see them get answered. Question: I’m looking at a ton of stocks that are now sporting dividend yields of 4%, 5%, even 7%.  Do you think it’s a good time to begin nibbling on these shares? Answer: This is sort of a corollary of the last question.  However, dividends are more meaningful than earnings because they put cold, hard cash in your pocket.  It’s true that many big investors often support stocks that show big yields, even during tough...

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What to do With Stocks That Tanked

October 31, 2008
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This is a dangerous time for investors, but it’s only partly because of what the bear market is doing to your portfolio.  In my experience, these are the times when investors tend to stray far outside the bounds of any normal, prudent system; they do exactly the wrong thing at exactly the wrong time. And that’s what really kills them. Why does this happen? Because when movements in the markets become extreme (on the upside or downside), emotions ratchet up. And when emotions ratchet up, investors want to do something … almost anything. Instead of patiently waiting and calmly...

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FAQ: Publications’ Performance

October 20, 2008
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Lately I’ve gotten the same question over and over and I’m guessing more readers are wondering about it as well so I’m going to share it and the answer with you here. Question: What are the track records for your publications? Answer: I’ve responded below by individual newsletter. You’ll note that some of our newsletters offer specific portfolio and advice and other don’t, and in the case of those that don’t, performance depends on how subscribers act on the advice. Cabot Market Letter, ranked fifth for 2007 among all newsletters tracked by Hulbert Financial Digest, provides specific portfolio allocation...

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