I have found that the best advisory services have provided advice that is significantly better than stock brokerage firm advice.
Stock brokerage firms have done well in rising markets, but in general their retail recommendations are often published after stocks have had major price advances.
These services have excellent track records. The history of their recommendations have been recorded. Only the strongest of these survive. If subscribers are not happy they leave. Since all of the companies like this have a high percentage of cancellations, only the strongest and the best survive.
The difficulties for the individual investor are:
1. They have to pay attention and buy quickly enough to avoid paying way too much.
2. Often, immediately after a recommendation the price goes up because of the recommendation and then pulls back again resulting in an immediate paper loss.
3. The investor must diversify to lessen risk and to keep the odds in his/her favor.
4. Most of the recommendations need to be held long term to get the maximum benefit.
5. Often the service gives sell recommendations after a position has dropped substantially.
A little extra knowledge on the investors part and a professional who can pay attention during the day when the investor is otherwise occupied can make a big difference.
Let’s look at how a knowledge of cycles might help.
First we would look at the long term chart.
This stock is in an uptrend. The price is relatively high and is trading above the higher blue band. If we purchase immediately, we would purchase a partial position. Our risk to exit the trade would be at about $100 or we could purchase a put option along with the stock to insure our risk.
Secondly, prior to purchase we would look at the intermediate term chart.
This chart is not too overbought and is okay for purchase.
Finally to see when we should buy during the day, we would look at a very short term chart.
This chart indicates an expectation of lower prices over the next few hours of trading, thus we would wait prior to placing our trade.
If we did our homework, we would benefit from good research. We would not be dependent on the publication to get us out if something goes wrong, because we are in control of our own plan.
In another letter I will discuss how to sell long term when things work out well, without waiting for the stock to break down from its uptrend.
If you have an interest in learning more about cycles and trading tools, go to the red button above and click on make an appointment with Bob . (online ) I will be happy to point you in the right direction.