No. of Recommendations: 3
You have a lot of questions, and I will try to answer them, to be best of my ability, but you will probably not like the answers. For one thing, they involve a certain amount of work. For another, some of your questions pre-suppose certain ideas that I think are nonsense.

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1. Does anyone use a money manager? I've obviously been recommended to use one given my dismal portfolio. If you don't use a MM - where would I go ie. any books/courses to learn to do this myself? Oh, and I am interested in learning this myself too.

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Stay away from a money manager. These guys will just put you is some "good" stocks or "good" funds, collect their fee, and go away. If you want to make money you have to trade. You have to know when a stock is in an uptrend and when it is in a downtrend. You have to use technical analysis to determine that. You have also to study the fundamentals, and make every effort to time the market. When the market is moving up, you need to be long stuff. When it is moving down, you need to be short stuff or in cash. If you have a sense of the market, you can find out how to determine these things.

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2. Just how much analysis is needed before you invest? Is this a list of what should be done first? A book? (I'm a reader :-)

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In is not a matter of how much, but what. Get Alexander Elder's books on trading, and also Bill Williams's books on Chaos Theory. Both of these books are geared to trading the futures, but they are valuable for those who trade stocks also. Specifically for stocks, there is CANSLIM, as developed by William O'Neil.

Given that, I do not practice CANSLIM, nor do I believe in Elliot Wave, as described in Williams's books. Still, this should be part of your education. CANSLIM works, but I think it is more trouble than it is worth.

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3. I understand I should rebalance my portfolio annually. How does one do this? Do you undertake all of the analysis carried out above again?

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This is called "hibernation investing". You make a decision on an arbitrary date. You go to sleep. You wake up on an arbitrary date and do something. Then you go back to sleep.

This is clearly nonsense.

The market does not move at fixed times. There is such a thing as "seasonality", whereby the best time to be long is November through April. However, even during that time, there are times to sell and buy whatever is appropriate.

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4. How often should I check on the companies I'm invested in?

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You should look at the charts daily. As I pointed out elsewhere, simple technical indicators would have gotten you out of Imclone, Worldcon, Qwest, and others before they tanked big time. Look at MACD(8,34) and RSI (14) particular. When those both say sell, get out. That happened with those companies long before the big decline.

The fundamentals will change at irregular intervals. So check daily.

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5. Is there a book or publication I should be reading on a regular basis to keep up to date? How did you guys get to be so savy?

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No. Just keep informed, participate in message boards that discuss trading, and be aware of what is happening. My experience with Barrons, for example, is that any stock they pan over the weekend is toast on Monday, but any stock they recommend will not move in a terribly dramatic way.

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6. I've seen quite a bit here about index -v- mutual funds -v- individual stocks. Why is it better to go with index funds instead of the mutuals? Don't they have the same fees etc, and aren't they just a grouping of various individual stocks?

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If you have silly idea that you are supposed to just buy a mutual fund and hold it forever, then there is probably nothing you can do that is right. On the other hand, if you trade mutual funds moderately actively, and if you time the market, you can certainly beat anybody who just buys and holds a mutual fund.

Remember: Never pay anybody (mutual fund manager or anybody else) to *manage* your money. There may be reason to pay somebody to *make* money for you. But if they are not successful, dump them immediately. Do not take the attitude "Oh Wow! He is so much smarter than little ol' me. So I will just trust him."

On the other hand, Hussman has managed his fund much better than anybody else I can mention. He has a hedging algorithm that has worked very well. The fund is HSGFX, and you can check out the hedging algorithm at his site: http://www.hussman.net. Click on the "research" link to see what he has to say. Look at the chart.

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7. What are your thoughts on Bond Funds? I've been recommend to go into Pimco Bond fund short term ..... I'm truly hesitant on this.

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Bond funds are simple: if you believe that interest rates are going down, buy a bond fund. If not, stay out. So, like everything else, there is no general answer. Depending on the time and the condition of interest rates, you should or should not be in a bond fund.

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There is a bunch of information, trading systems, timing systems, etc. on my site:

http://www.actwin.com/kalostrader/

Check out the links page, in particular.

Most of the people on this board have little respect for me or my opinions. I really do not care. Over the last 5 years, the S&P has gotten you less than a money market fund. Over the last 5 years, dollar cost averaging into an S&P index fund has actually lost you money. Now you can take the "long view" and say that 5 years is a short time. I think this is nonsense. The way to make money in the long term is to make money, or at least avoid losing it, in the short term.

I am very unhappy that I have only made a small amount of money this year. I have learned some things from that - namely to go short more often. Still, anybody who has been in an index fund is down 15% so far. I consider that absolutely unacceptable.

Above all, avoid Scott Burns, who writes for the Dallas Morning News, and who says that the movements in the market over the last several years are just "statistical noise." Besides the fact that "statistical noise" is not a well defined term, just look at a chart. If all you see is "noise" then go ahead and buy an index fund.

Recently, William O'Neil was interviewed on Bloomberg. The interviewer asked him what somebody should do who has lost money in this market. O'Neil said that he should realize that he has made mistakes, study the market, and learn from his mistakes.

The fluctuations of the market will continue, but you can make them work for you.

Or, to put it another way, "There is a sucker born every minute." But it doesn't have to be you. Hibernation investing, long term buy and hold, index funds, are for the suckers.
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