The stock market tends to move in cycles. The hard thing to determine is when one cycle ends and another one begins. If you as an investor make the wrong determination as to whether to hold or to jump, you might end up being on the sidelines watching a rally or invested, watching your stocks move downward. Trying to read the fundamental and technical signs to determine which stocks to buy now is what it is all about. A farmer knows when to expect rain or sun, but the market is less predictable than nature.

A former hedge fund manager, Andy Kessler, wrote in the Wall Street Journal that “In the long run the market is always right. On any given day, your guess is as good as mine.” Another saying on Wall Street is that “being early is the same as being wrong.” The late economist Charles Kindleberger once said “there is nothing so corrosive to good judgment as watching your neighbor become rich, and, unless you have an iron will, the odds are good that you would have finally capitulated at precisely the wrong moment.”

It is my opinion that an investor can never go wrong with good solid company stocks. During the downturn of 2008 I had investments in stocks that paid dividends. Even though the principle of my stock was going down, I was still making money from the dividends. Investing in dividend paying stocks at any time can never be a bad idea. This is especially true if the dividend is significantly better than what you would get from investing in the money market. One piece of advice then would be to buy shares in solid dividend paying companies.

In the end, you can try and identify the waves that are forming on the horizon and try and ride them to the promised land or you can accept the notion that doing so profitably over the long term is a difficult choice at best, and instead focus on a trading system couched in solid asset allocation and making current choices that will maximize your returns over the long run

I was recently talking to a broker and indicated a stock I had recently identified was having a good run. He indicated that therein lies the danger of picking one good stock. You tend to think you are infallible and can always pick the winners. It just does not work that way. . In other words, quit trying to be a trader and trying to time the market. You should instead determine good strong investments for the long run and stick with them.

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