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Health & Fitness

Stick With the Trend

When it comes to your money, follow the trend.

One of the things I see all the time is people never know what they should be doing.

I talk to people everyday and what I find always amazes me. They are fixated on the news and by doing that they are basically paralysed on what to do with their money.

For the last year they have been piling into bonds and bond funds. They have been pulling money out of the stock market,both their personal investment money and their IRA's and 401k's. The numbers published by the mutual fund industry show that people have been dumping stock funds.

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The problem is that people rely to much on predictions, which in most cases turn out to be wrong. I used do the same thing. I worked at major brokerage firms and we relied on our "analysts" to tell us what to do. Trust me, they were wrong way too much.

Over the years I have learned that "what is--IS." In other words you need to follow the trend. Stick with sectors that are strong on a relative strength basis. Strong sectors can stay strong for quite some time. They also can stay weak for quite some time. When relative strength changes you need to change, it's really not that complicated.

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Don't rely on predictions, rely on what is happening now.

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