All of us wish for an ongoing quality lifestyle after retirement. We are used to a particular lifestyle, and giving it up after retirement would not be easy. So it is necessary to supplement our social security and pension plans with a steady income flow. The best option available to us is to invest in mutual funds. There is only one rule to apply with investing in mutual funds and that is your mutual fund/s must outperform the S&P500 Index (which is only an average) during the last 12 months.
Wall Street might tell you to buy and hold, which isn’t a very good idea. Hanging on to your stocks when they’re not performing well enough would only make you a pauper. Furthermore, stock market experts might tell you that you need to watch the performance of a stock over a period of 3, 5 or 10 years, which I think is not required. Every stock might have done well 10 years ago but might be in decline right now, and you do not want to buy a stock that is in a downward phase.
The best idea that I would suggest to most investors is to have a close watch on the 200 Daily Moving Average published in the Investor’s Business Daily. This would give you an idea of the stock’s movement over a period of 36 months, 24 months, 12 months, 9 months, 6 months, and 30 days. This is more than enough information for an investor to analyse the movement of a stock and to predict its future movement. This does take time and effort but the advantage is that you will know how your stocks are performing and you need to trade only when you find that your stock is going below the 200 Daily Moving Average. This way, you could not only increase your profits but also protect your investment from unprecedented losses.
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