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Jack and Jill


Jack and Jill went up the hill to fetch abucket of ?money. Money? They are continuingto fill their bucket with stocks without anyconsideration to the value of these equities.They are not worried at all as they are buying"safe" mutual funds.

Everyone knows mutual funds are safe. Jackand Jill know they don't know how to pick goodstocks so they leave that to the fund manager.He is an expert.

When you look at the long term record of 99%of the mutual funds you will see that expertise hasbeen sadly lacking. I hate to remind you of the2000 to 2003 period, but I must. In fact I musttell you it is going to happen again. Now youwant to know when?.and so do I.

And that is the problem with almost everyfund manager. As long as the market is going up theycan't do much damage to your account, but whenit rolls over and heads down they have no ideahow to invest when a bear market is in progress. Not a single one of them will acknowledge thatcash is a position.

Cash is a position? They are in shock. Ofcourse they are. If brokerage customers puttheir money in a money market account while themarket is falling it means they do not make anycommission at all and if they recommend this totheir customers the brokerage manager will firethem because he won't make any money either."Keep your customers fully invested or I'll showyou the door" is the manager's comment.

You must learn when to sell. Any fool canbuy, but it is the wise man who knows when to sell.To see the condition of the overall market oneof the best indicators is the SP500 Index. Yourbroker compares everything he does with theSP500 because it is a broad base of 500 stocksthat are widely traded.

The finest indicator is the SP500 Index.Draw a 40-week chart of the closing prices. If youdon't know how ask your broker. He will tellyou. Write it down and save it. It is verysimple. Have him set up a 40-week Simple MovingAverage to appear on that chart. Look at 5 yearsworth of prices. Immediately you will see thatif you are in the market while the 40-week MA isgoing up you are making money and if you are outof all your positions while the index average isgoing down you will not lose money. It doesn'tget any easier that that.

Jack and Jill can fill their pail as themarket is going up and need not spill theiraccumulation while they walk confidently downthe hill holding their bucket full of cash notequities.

Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know.

Copyright 2005


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