G Spot1

A Safe Bet in a Bear Market Rally

Are there certain types of investments which work particularly well or poorly with trailing stops?

I'm thinking of the recent example of Dendreon (DNDN) where the stock punged almost 50% just before a positive announcement on its trials. Many commentators suggested that the stock price was manipulated to trigger stop orders, and some went so far as to say that with a speculative and highly volatile stocks like DNDN stops should be avoided. Indeed, the stock price rebounded in about a day, costing those with stops a lot of money unnecessarily.

Thoughts?

5 Conservative Plays for Risk Averse Generation Y Investors

I can say this speaks to me. I'm 32 and in my adult life we've gone from the dot com bubble to accounting scandals to the housing and credit bubble and Ponzi schemes. I, for one, don't trust the markets and feel like us individual investors are playing in a game that is waaay over our heads and is certainly not played for our benefit.

For me, though, I've decided to take control over more of my own investments. My 401ks/IRAs are in mutual funds but I've started doing my own homework for my other investments. Maybe this will crash and burn or maybe it will succeed, but it makes me feel a bit better for now to have some control. Interestingly, I've started employing just the strategy you are recommending and have looked at each of these stocks and similar ones. Investing in solid companies paying dividends seems to me like the only sure way a little guy like me can make money. I think this strategy would appeal to a lot of people in my generation.

I do agree with PastTense that an 8.9% return is too aggressive. With my financial planner, we've been using 7% expected return for pre-retirement investments, and I've been wondering if we should knock that down to 6, mostly because I don't think the overall stock market will repeat its history of gains over the next couple of decades. He said we are already being conservative in our estimates, but it is something I plan to revisit every year.