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Picked-up Jason’s “Stock Market Investing” at a bookstore on vacation recently. Completely changed my investing philosophy and made $7000 the first month. Was previously mostly in mutual funds but have a new confidence in common stocks. Highly recommend!
Thanks, Larry. What a testimonial!
Hi Jason, bought “The neatest little guide to Stock Market Investing” and I dare declare it’s the 1st book that I have managed to complete in a long while. Now I cannot wait to get started!
I hope you can help me clarify 1 point: when I use SMA/MACD/RSI to observe the trend, what time period (e.g. 5 days, 1mth, 3mth, 6mth) should I be looking at for any stock (e.g. MVV) to capture the trends accurate?
For SMA, usually 50-day and 200-day work well. For MACD, the default and perfectly fine parameters to use are 12-, 26-, and 9-unit time periods (day, weeks, months, quarters). For RSI, a 14-unit period is usually best.
I should caution you that these and all such methods are unreliable. They’re accurately explained in the book and are easy to accurately use, but even if you get everything right the market can go against you. I recommend reading my newest book, The 3% Signal, to better understand why it’s probably not worth the effort of timing and better to just automate your long-term account with the signal while focusing your energy and ambition elsewhere in life.
Whichever path you choose, I wish you well.
 what % of total liquid net worth do you recommend people invest in the base plan consisting of IJR and LQD?
IJR and BIV?
 can we start the plan any day or do we wait till the first of caledar quarter?
 do we buy $8,000 of IJR all at one time or do we spread it out over time?
Do we buy $2,000 of LQD or BIV all at one time or do we spread it out over time?
1. The plan is secure enough to safely handle 100% of your liquid net worth. If you want to run something less reliable but possibly more fun, such as a stock-picking program, I recommend limiting it to no more than 20% of your liquid net worth and running the remaining 80% with 3Sig.
2. Start the plan any time you’d like, but preferably after a quarterly buy signal. The most recent signal at the end of June was a mild buy, and IJR has gone up only slightly since then, so now is a good time to get started.
3. With $8,000 IJR and $2,000 BIV or LQD, I recommend just going in all at once. For larger balances, spreading it out can be emotionally comfortable, but usually lessens performance because the stock market rises more often than it falls (ever-present alarmist commentary notwithstanding). For more, see “Starting with a Large Cash Balance” on p. 134.
All the research I have found recommends against buying Proshares MVV or any leveraged indexed fund etf as a buy and hold. The say at the most, 4 day hold and then either cut your losses or grab your gains. I like your ideas in your book the neatest little guide, but cant find any support on your plan for beating the dow with the midcap 400 leveraging. Any thoughts?
They’re just wrong, Tom, and I don’t know why they can keep making the same wrong argument in the financial media despite historical evidence disproving it. Here’s the recent track record of buying and holding the leveraged ETFs versus the plain Dow:
See what I mean?
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