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Part I
The financial markets appear to be complicated,
in fact too complicated for most individuals to
participate in without a sound financial advi-
sor. However, many people are taking their fi-
nancial future into their hands by learning a few
things that help them make better decisions re-
garding their investments.
Good financial advisors have their value, estate
planning, planning for college for your children,
retirement plans and more. However, most are
not traders. Many have been taught to use mod-
els to project investment outcomes in the finan-
cial markets, and for years they have worked for
the long term time frame. Not so much in mod-
ern times, say for the past 17 years since 2000
stock market correction better known as the dot-
com crash 17 years ago.
In the 80’s and 90”s baby boomers were raising
their children, putting them through school,
spending money on housing, cars, toys, clothes,
etc. driving the economy higher which in turn
drove the banking system, business start-ups
and real estate higher. Economist refers to the
90’s as the roaring 90’s markets seem to go
straight up until bubbles began popping hitting
the tech sector hard. The year 2000 began the
17-year long sideways market. In fact, only re-
cently has the NASDAQ broke above 2000
high. It has given many market professionals
hope that the 17-year long sideways market is
over; but, only time will tell.
We can expect extreme bullishness is moving
forward if this sideways market is proven fin-
ished. Bullishness means a new bull market,
great opportunities for business start-ups and
economic growth. Even traditional investment
vehicles will work again for the long term time
frame. However, now is not the time to take a
chance investing in traditional slow retail invest-
ment vehicles. The financial markets need to
prove to us they will hold this breakout first.
Technical analyst like myself, are trained to read
charts of individual companies as well as major
market indices. There are specific trading and
investing rules that must to followed. At this very
moment in time,
analysts are waiting to get confirmation of this
bullish breakout in the major markets and indi-
vidual stocks. If markets confirm, analysts will
then get aggressive in the stock market putting
on new investments in specific sectors ready for
long term growth. It would be a thrilling time to
participate in the financial markets.
However, what if the major markets fail to give
technical breakout signals? Markets could do
this by moving lower back down into the 17-year
long sideways market range. Then we have to
be cautious and keep our investing short term. If
technical levels break to the upside or downside,
it is because we may see more erosion in the
markets, and we will swing trade, invest in posi-
tions for shorter time frames, no long term posi-
tions. Once a major support level is considered
broken, stocks will tend to get volatile and sell off
in big moves down. We do not panic here, no
not at all. Instead, we get aggressively trading
the downside as these are rare opportunities to
grow our portfolio investing funds in ways that
allow us to make gains from the downside
moves. In fact, since markets fall faster than
they tend to move higher, we can make great
returns quicker which investing in the downside.
As a Retail Investor, your funds may be tied up
into an investment vehicle that does not allow
you to participate in downside investing. In other
words, you may only be able to make money as
markets move higher. Some investment vehi-
cles for retail clients do not allow participating
with options using them as protection for your
stock and leverage. Many financial advisors do
not understand the intricacy of using op-
tions. Asking them too many questions about
options can lead to them giving answers like
“options are too risky” we do not use them. It is
true, there is risk involved, but it is also true that
retail clients have been left in the dark for years
from participating in stock options. Options have
been a nice little secret the wealthy have been
using for years. Wouldn’t you like to have the
ability to make money when stocks move up and
down?
In Part 2 we will continue to discuss the fi-
nancial markets.
Don’t just
Trade….
Trade to Win
The MVET
Way
Newsletter Title
Volume 1, Issue
1
Newsletter Date
Business
Name
Investing In the
Financial Markets
By: Jennifer Glick