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The Stock Market - - - A Challenge for Professionals

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Operational Questions & Answers

More Book Reviews

 

  • Most of the things that you think you know about investing are part of a mythology that is designed to make you transact. The Conventional Wisdom just isn't all that its cracked up to be.  
  • Concepts you worship are inaccurate; Indices and Averages you trust do not tell the complete story; The basic investment concepts still work.. if you only could determine what they are.
  • Take the test; win a free book

          

Are the following statements mostly True or mostly False? Let me know what you think in an email to: steves (at) sancoservices.com. If you've read The Brainwashing of the American Investor, please let me know.

TRUE FALSE

1) The proper gauge of your Investment Portfolio Performance is the change in market value over the course of a calendar year.

   

2) Mutual Funds are a safer route to long term investment success than trying to create your own portfolio of individual securities. 

   

3) Profit Takers and Traders hurt the average investor.

   

4) Index funds will always beat the market.

   

5) The Dow Jones Industrial Average is comprised of investment grade companies, and generally gives a clear indication of what is going on in the Stock Market.

   

6) In the long run, investing in the Stock Market will assure you of keeping up with inflation.

   

7) Annuities are perfect investments at retirement both for people of limited resources and for the wealthy, particularly Variable Annuities.

   

8) Technical Analysts can predict the future movements of the economy, individual securities, and the Stock Market with a very high degree of accuracy.

   

9) A clear indication that you are a savvy investor is your use of an on-line deep discount broker.

    

10) There is no such thing as a freebie on Wall Street.

   
11) It is important that you take your tax losses regularly, particularly if you have held the losing position for less than one year.     
12) Asset Allocation is a strategy used by investors to move assets from weak markets to strong ones in order to improve the growth of the Investment Portfolio's bottom line.    
13) "Sell your losers and let you profits run" is the essence of sound Investment Management Thinking.    
14) Closed End Mutual Funds (CEFs) are not popular with Wall Street professionals because they are inherently more risky than normal Mutual Funds.    
15) It's better to buy shorter duration corporate and municipal bonds, because their market value doesn't fluctuate as much with anticipated changes in the direction of interest rates.    
16) No Load Mutual Funds are particularly good for investors because the mutual fund company does not charge anything for it's services.    
17) Packaged Investment Products are designed with a sincere concern for the financial well being of the average investor, and are good for everyone.    
18) Stock Brokers are well trained in all aspects of investing and investment portfolio management. Consequently, a significant portion of their compensation is tied directly to how well they help their clients develop high quality, properly diversified, and goal directed portfolios.    
19) Smart Cash is an integral part of any Asset Allocation Formula because it allows investors to time the market successfully. Professional market timers know precisely when to move into or out of cash in anticipation of the next major  directional change in the market.    
20) Buy and Hold continues to be the proper investment strategy for most individual investors.    
21) It is a well known fact that there are certain Core Portfolio issues that belong in all investment portfolios if long term success is to be expected.    
22) Every properly diversified portfolio will have up to 5% in each of these areas:  miscellaneous speculative opportunities, gold or other commodities, small cap stocks, and global index funds.    
 23) Zero Coupon Bonds are an important part of the fixed income portion of the investment portfolio, especially when retirement is contemplated within five years or so.    
24) These are the FOUR most Important Investment Ideas:
  • Keep commission costs down;
  • Establish a target for taking profits;
  • Buy high quality securities;
  • Increase annual income.
   
25) If an investor can learn to control his own Greed and Fear, he will have a much better chance of investing successfully.    
26) The second step in every stock purchase should be the establishment of a Stop Loss Order. Such an order assures you that your losses will be limited to a specific percentage of your purchase price.    
27) Investment Grade Value Stocks will be the next red hot market sector.     
          Note: Only two of these statements are completely true. The correct answer will win you a free copy of The Brainwashing of the American Investor.

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