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Another useful technique for my dedicated students to follow:

July 6, 2010

I didn’t mention this technique in my first book on investing strategies, but I am formulating it this afternoon to add somewhere in my second book on investing that is coming out this year. Did you know that when the stock market goes up or down a lot, like this year, you can alleviate your market anxiety by gauging whether there is a threat to your portfolio that require a sell off. Here is how to do that:

Turn your computer on, go to your portfolio, scroll down and look at your cumulative percentage capital gain (CPCG), usually in green color. Write down the dates when the percentage tends to be relatively high or low. Overtime, by just looking at the list of dates,  you will be able to instantly estimate if your portfolio paper earnings (PPE) stays within the quarterly range of success (QRS). For example, my lowest for the year so far was on January 15, at 235%, and the highest for the year was on April 21, at 321%. The lowest for the quarter was at 279% on April 4th and the highest at 293% on July 4th. Translating the numbers to reality means that the market correction cost the portfolio a 42% lose, but I am still 44% ahead since the start of the year! (For those of you who are not my students, if you are amazed by the numbers, relax, I am a professor of psychology specializing in BLASH, and apparently psychology predicts share prices better than economics).

2 Comments leave one →
  1. Myrtle permalink
    July 6, 2010 4:43 am


  2. July 24, 2010 2:36 am

    You welcome.

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