Stock Market

SMI's Upgrading strategy does a great job positioning investors for the dominant trend of the market, whether bullish or bearish. But when the market trend reverses, it takes time for Upgrading to adjust. That process appears to be underway right now.

SMI's "Bear Alert" indicator recently triggered, meaning that a bear market appears likely (the indicator has been accurate 11 out of the 12 times it has sounded in the past 50 years). How should you respond to a possible market reversal? Do you need to respond at all? The answer depends on several factors. This month, we discuss these factors — and help you work through an objective process for making a "sound mind" decision about your investing strategy.

Giving your broker ahead-of-time orders can help you buy at better prices and protect your profits. But watch out — sometimes automated orders can work against you.

Price-to-earnings ratios can be helpful in understanding how reasonable (or unreasonable) stock or mutual fund prices are. But not all P/E ratios are created equally, so it's crucial to know which type of P/E you're dealing with.

How much risk are you taking on when you buy a certain stock or mutual fund? There's no foolproof way to know, but the price/earnings ratio can offer some good clues.

The market continued to post big and widely distributed gains in the first three months of 2010 — good news for investors following SMI's model portfolios. And a closer look at the last decade reveals that overall market performance wasn't as bad as you may have been led to believe.

Contrary to the conventional wisdom, we think investors should be more concerned about overall performance than fund costs.

The 21st century is bringing a reshaping of the worldwide investing landscape, driven by the globalization of financial markets, a rapidly expanding global middle class, and a long-term downward trend in the value of the U.S. dollar. To be sure, the United States remains the world's largest and strongest investing market. But other nations and regions are becoming increasingly attractive, as investors see greater growth opportunities beyond America's shores.

Ideally, SMI Upgraders would own as many of our "recommended funds" as possible. But suppose you can afford only the top-ranked fund in each Upgrading category? Can you upgrade effectively with a portfolio of just five funds? We've run the numbers and have the results.

Want to know how your results compared to the overall market? Here's a simple way to do the math.

Which investments are most likely to pay off in the New Year? No one knows for sure, of course. But a careful look at the economic landscape does suggest where the opportunities and risks lie. Here is our annual guide to allocating your investments over the next 12 months.

If you're an Upgrader, the Recommended Funds report offers key information that can help you make good decisions when selecting mutual funds. Depending on your preference, the report allows you to keep things simple or go deep.

Selecting the right brokerage firm is more than just a start-up exercise for launching an investing strategy. Your choice likely will play a key role in whether you faithfully implement your strategy. While there's no one-size-fits-all choice, some companies are better suited than others to meet the specific needs of SMI investors. We take an in-depth look at several of the top contenders — and offer our recommendations.

Your investing decisions should be made on the basis of a personalized, written strategy. As an example, we offer a written plan for making the transition from Level 3 to Level 4.

By rolling out a line of exchange-traded funds that can be bought and sold without commissions, Schwab is erasing the cost difference between ETFs and index funds. That bodes well for the average investor.

Like other segments of the market, REITs have rallied vigorously this year — and they have attractive characteristics for inflation-wary investors. But before signing on, be sure you understand where the landmines are.

Bad news for the U.S. dollar is usually good news for your overseas investments. We explain why.

As the economy returns to health, certain types of stock funds are likely to perform best. Be sure they're well-represented in your portfolio.

Most of us don't have the stomach for a lot of volatility in our stock investing. Fortunately, there's a way to smooth out the ride.

As much as 90% of your long-term investing results can be traced to one fundamental decision — and you need to understand why.

Without a plan, it's easy to be blown about by the current emotions of the market. That's hardly a formula for long-term success.

Could hyperinflation ever take hold the U.S.? Until recently, it's been difficult to imagine such a scenario. But given the massive amount of money being pumped into the economy and the clear spending ambitions of the president and congressional leaders, we can no longer rule out the possibility. For investors, preparation for a potential surge in inflation begins by understanding the nature of money, and why tangible assets such as gold offer a reliable store of value.

If rapid inflation is in our future, as some economists predict, how can you protect the value of your investments? Historically, investors have turned to assets that have proven to be reliable stores of value due to their physical attributes. Gold is one popular example of these sorts of "tangible" assets. This month, we look at five ways to invest in this precious metal, including gold coins, bars, and "digital gold currency."

The U.S. has enjoyed relatively low inflation for so long that the inflationary economic pain of the 1970s has been largely forgotten. But many economists say current government policy is a recipe for renewed inflation — perhaps at a level rivaling or exceeding the 70s. If high inflation returns, what kind of investments will offer the greatest degree of protection? Which are most likely to suffer loss? We evaluate the likely winners and losers of a potentially inflationary future.

The prospect of doubling your returns by using leverage seems enticing. There's only one problem: leverage tends to work against you harder than it works for you.

The most common bear market mistake investors make is selling when stocks have already fallen significantly, rather than hanging on for the rebound. But what if this isn't a "normal" bear market? What if this one turns out to be much more destructive than normal? Should you act now to protect yourself against continuing large losses? This month we focus on this "what-if" scenario and suggest specific steps for investors willing to make the tradeoffs necessary to defend against potentially significant further losses.

When a newscaster says, "The stock market was down today," what does that mean in relation to your investments? Perhaps less than you think.

Virtually all stocks seemed to move in unison last year — downward. Now, some categories of stock are starting to break out of the pack. That's good news for Upgraders.

At a time when investors are desperate for advice, the approach of an unassuming man from Omaha (who also happens to be one of the world's most successful investors) is worth heeding.

The stock market returns about 11% a year — on average. But behind that average are plenty of year-to-year extremes.

The longer you're willing to keep your money in the market, the greater the likelihood of success. Not convinced? Look at the evidence.

Despite outperforming the market averages in four-out-of-five risk categories, SMI's Upgrading strategy trailed the overall market in '08. Is there any hope for better days ahead?

Many Upgraders own just one fund in each risk category. Want to diversify? Here's how to choose a complementary second fund.

TD Ameritrade is changing its required holding period from 90 days to 180 days. If you're an Upgrader with an account at TDA, should you change brokers?

As we survey the massive damage inflicted by the financial tsunami of 2008, one thing is clear: biblical financial principles offered significant protection to those who've been living by them.

Because of the body's natural reaction to fear, rattled investors often make rash and costly decisions. Fortunately, biological responses to fear can be overcome. How? A key is knowing what you believe.

The way you divide your portfolio between stocks and bonds has a bigger impact on your eventual returns than any other single decision. Has the difficult first half of 2008 driven you out of stocks? Or are you persevering, trusting the traditional superiority of stocks will once again reassert itself? In this article, we look at historical patterns and how they can be used to guide your portfolio allocations as you plan for retirement.

Knowing when to sell your mutual funds is just as important as buying good funds in the first place. There are four specific criteria that tell you it's time to sell. Unfortunately, even when investors understand the theory of why they should sell, too often they still fail to act — because of fear, lack of confidence, or simple inattention. To encourage a tough-minded look at your current holdings, we've studied thousands of funds and present a "Laggards List" of more than 950 that should be replaced without delay.

Sitting on the sidelines and waiting until the worst is over? Our time-tested "all-clear" signal will help you know when the market has reached a turning point.

Two large investment banks implode; an ailing insurance company almost collapses; the government acts to bail out the two companies that hold roughly half of America's home mortgages. No doubt about it. Recent headlines have been dire. But investing history suggests this may be just the time to face the future with confidence.

Relentlessly rising oil prices. Inflationary pressures building. Slow economic growth. And a stock market stuck in neutral. To veteran investors, it's starting to feel like the 1970s again. What should you do if the market repeats its 1966-1982 experience and stays stuck in the same range for several more years? Two simple questions can reveal the answer.

Making investment decisions based on an emotional response to market events could undermine your long-term gains. Here's one way to keep your emotions in check.

With the stock market showing meager gains over the past 10 years, many are talking about it having been a "lost decade" for investors. Sound like bad news? Dig beneath the surface and you'll find the seed of some very promising news for the next 10 years.

With so many different types of stock funds out there, how do you even begin to sort them all? SMI's approach is to categorize them first by the size of the companies they focus on, and secondly based on the style they follow. Combining these two risk frameworks establishes a useful "risk ladder" to work with.

Putting this market ideal into practice is tough on the emotions, but ultimately rewarding for your pocketbook

Lurking in the portfolios of millions of investors is a time-bomb threatening their financial security. This threat comes from the most unlikely of sources: your employer's stock. We explain the risk and offer guidelines to determine how much is too much.

If you're interested in investing directly in individual stocks, dividend reinvestment plans are a great way to get started. Here's a primer on how to build a portfolio of stocks one "drip" at a time.

Load vs. No-Load. Class A, B, C, R, Y, Z…what does all this mean? Selecting mutual funds can be confusing, but by learning just a few key principles, you can cut through the maze of confusion and find exactly the right funds for you. We deliver the basics you need to know about mutual fund types and share classes.

For the second year in a row, the stock market has subjected investors to a sharp summer swoon. Last year's version turned out to be a brief set back that set the stage for superb gains over the following twelve months. Investors are still holding their breath waiting to see how this year's version will end. At times like these, a basic understanding of bear markets and corrections can go a long way towards maintaining a sound mind perspective. If you fear the next big bear market, we have encouraging news to offer you.

Every investor balances the competing forces of risk and reward in building a portfolio. We normally focus on this tradeoff through the lens of asset allocation — how much of your money is put in stocks vs. bonds. But strategy allocation can also help fine-tune your risk/reward balance. New research on combining two of SMI's most popular investment strategies offers some insight.

One of the many benefits of dollar-cost-averaging is it frees you from the worry of whether you're buying at the "wrong" time. But what impact does DCA have on your long-term investing returns? The results of our recent research may surprise you.

The biggest obstacles to successful investing often involve our own emotions. Logically, we know that buying stocks when prices are low makes sense. But we feel so much better about investing when the market is going up! As a result, many investors buy near market tops and stop buying during bear markets, exactly the opposite of what they should do. Dollar-cost-averaging is a mechanical strategy that helps avoid these pitfalls by removing emotion from the investing process. Here you'll learn five specific benefits of DCA and see how to implement a DCA investing plan of your own.

Many investors try to beat the market rather than simply match the market. That's fine. But often, it's the market matchers who actually come out ahead.

One feature brokers promote to unwitting customers is access to the supposedly valuable research their firm's analysts produce. But is brokerage research actually worth much at all? Come along for a peek behind Wall Street's curtain — a place where "Buy" sometimes actually means "Sell".

In investing, as in relationships, you're more likely to make serious progress if you're willing to make a commitment. Here are 7 advantages of automating your investing with a systematic investing plan.