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Thomas H. Kee Jr., is President and CEO of Stock Traders Daily and author of 'Top of the Market to You!' Mr. Kee's reports and analysis are currently featured by Reuters Research to their institutional clients. He serves on the board of many companies and provides economic analysis and... More
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  • Stock Of The Week 0 comments
    Jun 28, 2013 2:08 PM | about stocks: ADBE, SCHW, AMTD, IBKR

    In market environments like what we are in today traders are doing much better than investors. However, given what has happened to the market since January 1, 2000, traders have arguably fared better than buy and hold investors for quite awhile. Although some investors are now as giddy as ever because the market is still relatively close to all time highs, the truth is that anyone who has been invested in anything that has tracked the market has had meter returns over the past 13 years.

    More specifically, the S&P 500 is up only about 10% since December 2007, and all of those gains came this year. Of course, anyone who bought at the ultimate bottom did very well, but in order to buy at bottoms like that investors must first be willing to sell at relative highs. Otherwise, instead of actually making money, buy and hold investors are simply recovering without making any positive headway.

    At Stock Traders Daily we recognize the dilemma here, because what if the market continues to increase? Investors do not want to be left out if the market continues to increase, so they are unwilling to sell sometimes, but a better idea might be to transition the investment strategy without exiting the market completely. By transition I mean switching from a strategy that is designed to ebb and flow with the market to one that is not correlated to the market at all.

    One said strategy is the Stock of the Week strategy offered by Stock Traders Daily. This strategy is up over 250% since December 2007, against the S&P 500 which is up only about 11%, and the reason is risk control, but there are obviously other factors at play. This Stock of the Week strategy is not short the market all the time of course, in fact last week the strategy bought Adobe Systems Incorporated (NASDAQ:ADBE) and sold it for a 3% gain. Sometimes, if necessary, this strategy will adjust to the short side, but people who follow a strategy like this do not need to watch the market all the time.

    Instead of being glued to a computer like many risk control strategies require you can actually enjoy your day, do your job, play golf, or do whatever it is that you need to do while taking advantage of this strategy at the same time. This is a viable strategy, it can work in any market environment, and if there is any risk that the market declines like it did twice already since the turn of the millennium than a strategy like this deserves attention, but it is important to understand that it is not difficult to use.

    With tools already provided by brokerage firms such as Interactive Brokers Group, Inc. (NASDAQ:IBKR), Charles Schwab Corp (NYSE:SCHW), TD Ameritrade Holding Corp. (NYSE:AMTD), E TRADE Financial Corporation (NASDAQ:ETFC) , and any other online brokerage firm available to you, the ability to place conditional orders already exists and this Stock of the Week strategy is based on conditional orders.

    The best way to evaluate the Stock of the Week Strategy is to first see why it is so attractive and then see it in action. With a firsthand account the effectiveness of this strategy becomes clear.

    Themes: Trading, stocks, strategy Stocks: ADBE, SCHW, AMTD, IBKR
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