February 27, 2016: For Our Mutual Benefit

On Next Week In Stocks, we spend a lot of time talking about risk management. This week was no different. We went through a number of stocks and asked a very simple question, “If you own this stock, should you sell it now or should you hold”? The reality is that you should have made that decision before you bought, but the vast majority of retail traders never think this way.

In the markets, there is no certainty, only probability. You are going to be wrong sometimes, so you need to determine when you are going to get out of a stock (or any investment) before you buy. Again, very few investors think this way. They just assume that stocks will always come back. They don’t.

One of many problems with mutual funds is that you can’t really control when you get out; there is no real risk management. On this week’s show we discussed this and many other problems with these funds. We also talked a little politics. Check out this week’s show here: 

Given this week’s topic we are going to be doing a special class, “Outperforming Your Mutual Funds”. We will discuss alternatives to giving your money  these funds and hoping for the best. As we have discussed many times, the market is likely to be volatile, but unlikely to actually appreciate more than 1-2% a year for the next 10-20 years, given today’s valuations. Mutual funds are likely to do worse. If you would like free tickets to the class, call 84-48-Income (844.846.2663) and tell them that you read about it on the Next Week In Stocks website. I hope to see you there!

Click Here For Free CD Offer!

If you would like to submit a question to the show, or to give us feedback, please send an email to:  phoenix@tradingacademy.com. Also, check out our sister show, “The Right Side Of The Trade” on the following stations:

◾Money Radio 1510 and 99.3: Thursday and Saturday at noon

◾1100 KFNX:  Wednesday at 3pm

Of course, you can always find “Next Week In Stocks” on:

◾550 KFYI: Saturday at 1pm and Sunday at 4am

February 20, 2016: A Confidence Game

A quick note on the market.This show was recorded very early morning (about 1am) Thursday February 18th. The S&P was in a key supply level, with the top around 1940. This will be an important level to watch. A break above here and there could be another significant move up, but if the market cannot break through, we could certainly test recent lows (in the 1800 region). If those don’t hold, there is a lot of potential downside below there. On Thursday the market pulled back slightly, but could still go either way.

Over the prior four days, the Dow moved up around 1,000 points from its lows to its highs. Many people are now suggesting this is a great buying opportunity. Maybe, but I’m not convinced. In this show, we discussed what is likely driving the market higher, and why that might change quickly. Check out our analysis here:

Given this week’s topic we are going to be doing a special class, “Reaching Your Financial Goals in a Zero Growth World”. We will discuss alternatives to just hoping that the market goes up strongly for the foreseeable future. As we have discussed many times, the market is likely to be volatile, but unlikely to actually appreciate more than 1-2% a year for the next 10-20 years, given today’s valuations. If you would like free tickets to the class, call 84-48-Income (844.846.2663) and tell them that you read about it on the Next Week In Stocks website. I hope to see you there!

Click Here For Free CD Offer!

If you would like to submit a question to the show, or to give us feedback, please send an email to:  phoenix@tradingacademy.com. Also, check out our sister show, “The Right Side Of The Trade” on the following stations:

◾Money Radio 1510 and 99.3: Thursday and Saturday at noon

◾1100 KFNX: Sunday at 11am and Wednesday at 3pm

Of course, you can always find “Next Week In Stocks” on:

◾550 KFYI: Saturday at 1pm and Sunday at 4am

February 13, 2016: Gellin’ Like Janet Yellen

This week we looked at Fed Chair Janet Yellen’s testimony before the House on February 10th (the show was recorded that evening). Most of the focus was an analysis of her comments on the jobs market, but we also touched on other parts of her testimony, and had a general discussion about the concept of “The Fatal Conceit”, the idea that experts can guide anything (like the economy) better than the market. (Short answer, they can’t.)

In general, I don’t see anything taking this market higher in the short term, on a sustainable basis. There will be rallies, but the trend is still down. One day we will do more QE and/or move to negative interest rates and this may change, but for right now it is hard to see the catalyst for a strong, extended move up. In the show we also talked about some key levels to watch in the S&P. Check it out in more detail here:

Given this week’s topic we are going to be doing a special class, “Profiting On the Downside”. We will discuss alternatives to just hoping that the market goes back up. If you would like free tickets, call 84-48-Income (844.846.2663) and tell them that you read about it on the Next Week In Stocks website. I hope to see you there!

Click Here For Free CD Offer!

If you would like to submit a question to the show, or to give us feedback, please send an email to:  phoenix@tradingacademy.com. Also, check out our sister show, “The Right Side Of The Trade” on the following stations:

◾Money Radio 1510 and 99.3: Thursday and Saturday at noon

◾1100 KFNX: Sunday at 11am and Wednesday at 3pm

Of course, you can always find “Next Week In Stocks” on:

◾550 KFYI: Saturday at 1pm and Sunday at 4am

February 6, 2016: When Buy and Hold Fails

This week we revisited the Trump decision to not participate in the last Iowa debate and his subsequent second place finish in the Iowa caucus. There is now much debate about whether this hurt him significantly in Iowa. Who knows, but the point we made last week about risk/reward is critically important. I didn’t see how sitting out was going to help him; I did see how it could damage him.

So what does this have to do with anything? When you look at your portfolio, right now, what is your risk/reward position? What do you own? When will you sell what you have, either because it reached your profit target or a preset loss level? For most retail traders, their risk/reward position is awful. In January 2015 I said that for most retail traders the risk/reward equation was unattractive for them. From that point the market moved up a total of 3%, and then fell a maximum of 15%. It is currently still down 10% from its peak. I still think the risk/reward for the buy and hold investor is poor and one day the 10% drop will be seen as nothing. At some point the market must fall hard. The timing is unknowable, but the eventuality is certain.

Successful traders and investors understand that the same strategy will not always work in all markets; otherwise there would only be one good strategy! Buy and hold was great when the country was growing quickly, as populations grew and productivity increased, but that is not our current world. Even now, when we are still near all-time highs in the major indexes, the market has only yielded about 2% a year, compounded, over the last 15 years, and very few financial advisers, mutual funds or retail traders have even kept up with the market. Given today’s valuations, this number is likely to be lower over the next 10-20 years. This does not mean a general slow market increase, but wild swings up and down that will ruin many a financial future. It will also cause havoc in our nation’s public pension system.

In this type of market, it is critical to be flexible, to have different tools. Buying and holding stocks for the long-term is likely to end in tears for most people. Check out this week’s show to understand why, and learn a better way:

As a note, in this show (recorded about 1:30am MT on 2/3/16), we also previewed Friday’s jobs report. Regardless of the number, even if we get a quick bounce, I think it will be short-lived. In the show I explain why.

Given this week’s topic we are going to be doing a special class, “When Buy and Hold Fails”. We will discuss alternatives to just hoping everything works out in your favor. If you would like free tickets, call 84-48-Income (844.846.2663) and tell them that you read about it on the Next Week In Stocks website. I hope to see you there!

Click Here For Free CD Offer!

If you would like to submit a question to the show, or to give us feedback, please send an email to:  phoenix@tradingacademy.com. Also, check out our sister show, “The Right Side Of The Trade” on the following stations:

◾Money Radio 1510 and 99.3: Thursday and Saturday at noon

◾1100 KFNX: Sunday at 11am and Wednesday at 3pm

Of course, you can always find “Next Week In Stocks” on:

◾550 KFYI: Saturday at 1pm and Sunday at 4am