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The struggle in the stock market

There are times when the stock market is in an up trend but the process of managing real money is a challenge. In fact sometimes it can be an outright struggle. The spring of 2014 was the start of a nearly two year long struggle and now we are in another similar battle.

One of the keys to success in an investment environment like this is to be vigilant about execution.Here's how it starts;

  • Buy stocks undergoing a break out. The purchase price should, ideally, be within 5% of the break out price.

  • Be willing to sell any stock that isn't working especially those that undercut the buy price. Don't wait for the loss to get large by selling it at no worse than a 6-7% loss.

  • Sell stocks that undercut their 50 day moving average.

  • Own only those stocks that qualify as leading stocks. This is not always cut and dry but many investors think they own good stocks when in fact there are literally thousands of other stocks that are higher ranked.

Use the guidance to lead you. If you don't have the time or you're striking out use the managed portfolio service. It's low cost and will, almost assuredly, produce better performance.

Another key to success is to be aware of the phase the market is in. A phase can be a few days or it can be a few months but in either case use that "big picture" view to keep the daily gyrations in context.

One day is rarely that important in the markets. Think of them as a series of sessions strung together in the trend and the process of making decisions with real money.

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