Wednesday, March 21, 2007

Surf's up!

Hopefully you managed to buy into a stock fund or two when the S&P 500 was down around 1380. Today the market is up over 3% from that point, and leveraged funds that move twice as fast as the market are up more than 6%.

I put 25% of my savings into leveraged funds when the S&P was near 1380, and now I'm thinking about when to sell. I'll probably start cashing out above 1450.

There's no guarantee that the market will go up more this week; it could plummet back below 1400 tomorrow for all we know. So now is probably not a good time to put more money into stocks. Always buy low and sell high, and wait for the right price to occur before doing either. Patience pays off in the stock market.

Tuesday, March 06, 2007

Has the market topped?

The Guru's latest forecast hints that the S&P 500 will not rise above the 1400's over the next several months. It's unusual for him to emphasize an upper limit to the market, especially considering that the long term forecast is still positive. If he is right, (and he's been right every time so far) then the market is going to bounce around in a relatively narrow range of values, and it will be difficult to make a lot of money.

The only way to take advantage of this kind of market is to buy bull funds near the dips (near or below 1400) and bear funds near the peaks (above 1450). Hopefully that way I can collect a series of small gains that add up to a big gain.