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Dr. Winton Felt - ArticlesIn his research, Dr. Felt has tested the profitability of more than 50,000 investment strategies each under a wide range of market conditions using multivariate analysis. He used the results of his analyses to design high total-return strategies. Dr. Felt has managed institutional and individual portfolios and has taught investment strategy seminars and tutorials for investors and brokers. Dr. Felt has other tutorials at his Web site: http://www.stockdisciplines.com. For information on stop losses and for a simple way to obtain volatility-based stop losses without needing to know how to do the math, go to http://www.stockdisciplines.com/stoplosses. The diagram referred to above can be seen in Tutorial 24 on that Web site or at http://www.stockdisciplines.com/page/1539717.
Where to Put a Stop LossWhether you use volatility-based, Fibonacci. Gann, percentage declines, pivot points, or any other method for determining where to put a stop loss, your stop loss will sometimes be triggered just before the stock resumes its climb. Learn to live with it. The alternative can be disastrous. Select Stocks by Combining Technical and Fundamental ScreensA stock selection strategy designed to find stocks that are likely to appreciate significantly within a relatively short time should include both fundamental and technical screening systems. The technical is useful for identifying setups and in the timing of purchases and sales. Good fundamentals are the fuel that enable sustained flight. Be Both a Short-Term Trader and a Long-Term InvestorShort-term traders often assume less risk than long-term investors. There is a right time and a wrong time to own the stock of every great company. The smartest investors base their decisions on the balance between risk and reward, not on a pre-determined holding period. Short-Term Stock Trends and Risk ControlRisk control is more important than being a long-term investor. Stock trends are becoming shorter. Risk is increasing. Riding out all dips in stock price can lead to disaster. The Advantage of Exchange-Traded Funds (ETFs)In general, ETFs are less volatile than individual stocks, have many of the benefits of sector and index mutual funds, and a relatively low expense ratio. Fraud, as has occurred with standard mutual funds, is virtually impossible. They are worth considering as alternatives to individual stocks and standard mutual funds. Stock Market Investing: Long-Term or Short-Term?To buy and hold stocks for the long-term has been the preferred approach to stock market investing for many decades. However, in a volatile stock market this approach can be very expensive in terms of risk vs. return on investment. The long-term holder may not be taking the wisest course after all. The Fundamental vs. the Technical in Stock Buy and Sell DecisionsIn a volatile market, technical signals tend to precede announcements of change in the fundamentals of a company. Understand how this works and how to use both the technical and the fundamental in your buy and sell decisions. What does "Timing the Market" or "Market Timing" Really Mean?As practiced by professionals, "market timing" is about buying and selling in accordance with a predetermined set of conditions and rules. It is about following the buy signals and the sell signals. It is not about investing according to how one "feels" about the market, and it is not about the illegal activities of some mutual fund managers that the media has referred to as "market timing." The Best Stop Loss for Long-Term InvestorsWherever the stop loss is placed, there is the chance that the stock will reverse course after the stop loss is triggered. We wondered if there was an optimum stop loss placement that would minimize both the loss allowed by the stop loss and the probability of a reversal after the sale. Diversification and Stop Loss PlacementSome of the most respected names in the investment world (Granville, Weinstein, Dines, Magee, Zweig, Sperandeo, Schwager, O'Neil, Murphy, and others all agree on the necessity of using stop losses. Though they do not seem to agree on how much of a stock decline to allow selling, they are much closer in their thinking than is apparent on the surface.
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