Investing For Average Joes #6

The current market is even more unpredictable than any of the previous year's markets because we have not seen the bottoming-out of the economy yet. The Stock Market seems to have bottomed and is back on a general rise but it could easily slip down again if any more major companies fail. So it would be wise to learn techniques for saving what profits we can gain.

Now that I've covered the basic things to start your investing portfolio, it's time to add tools to keep your money as safe as can be, given the market's current volition. One of these tools is called a 25% trailing stop. It's a bit complicated at first, and can be later, as well, but it is a vital tool to keep losses to a minimum.

Let's say you buy XYZ at $2.00 a share. Calculate 25% of $2.00, which is $.50, and set your stop-loss with your stock manager or stock purchasing site at $1.50. This way, it will keep you from losing more than 25% should the stock drop for some reason. As the stock grows, change the setting so that it keeps up with the current price. You want to keep the mark at 25% of the stock's highest point.

So if XYZ grows to $3.00, 25% would be $.75, so you would change your stop-loss setting to $2.25. In this example, the worst you could do is get a gain of 25 cents per share. If XYZ goes to $4.00, 25% becomes $1, so you set your stop loss at $3 and the worst you can do is a profit of $1 per share. This can be complicated, especially if you are not a math person, but it is necessary and has saved me money several times already this year.

Sharebuilder.com has a stop-loss option for every stock in an account. It can seem tedious to set stop-loss orders for all our stocks but it does two things: It keeps your losses to a minimum and it keeps you aware of your portfolio. Being aware is what could have saved everyone's accounts last October.

In fact, if everyone had had a 25% trailing stop on all their accounts last October, think of all the money that would have been saved! I know 2 people that lost more than 50% of the value of their portfolios and I'm sure you know others, as well.

So let's spread the word and help America keep Her losses at a minimum. Perhaps that's a bit dramatic, but it IS the Speed Of Life, after all. See you next time. Good Investing!!!

New Source For Information

I apologize for not taking better care of my blog recently as finding Wifi has been extremely difficult but now I've found an excellent source for new stories. It's www.slashdot.com. They put out a daily newsletter full of techie news and curious oddities from which I can glean material from time to time. Which brings me to today's entry.

Hugh Pickens writes "The NY Times reports that Inventor Stephen Kurtin has developed glasses with a mechanically adjustable focus that he believes can free nearly 2 billion people around the world from bifocals, trifocals, and progressive lenses. Kurtin has spent almost 20 years on his quest to create a better pair of spectacles for people who suffer from presbyopia - the condition that affects almost everyone over the age of 40 as they progressively lose the ability to focus on close objects.

The glasses have a tiny adjustable slider on the bridge of the frame that makes it possible to focus alternately on a book, a computer, or a mountain range in the distance. 'For more than 140 years. adjustable focus has been recognized as the Holy Grail for prebyopes,' says Kurtin. 'It's a blazingly difficult problem.'

Each lens is actually a set of two lenses; one soft and the other firm. The flexible lens (near the eye) has a transparent, distensible membrane attatched to a clear rigid surface. The pocket between them holds a small quantity of crystal-clear fluid. As you move the slider on the bridge, it pushes the fluid and alters the shape of the lens."

The product is called TruFocals and can be found at www.TruFocals.com . The introductory price is $895 a pair, which seems a bit pricey since they are slightly dorky looking, aside from the fact that it more than doubles the alternatives. It remains to be seen if the product will hold up to the scrutiny of the market.

It seems to me that, given the fact as stated by Stephen Kurtin that there are a potential 2 billion customers in the world, that starting out at such a high price is a bit cheeky. I mean, who really needs a potential 1.7 trillion dollars? Just a thought. All in all, the invention is certainly worthy of a Speed Of Life rating. If anyone gets a pair, tell us how they work for you. Who knows, they might even have an affiliate program.