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Street Dogs: Three myths that could hold an investor back THE Dow Jones industrial average is above 12000. The Alsi is at a record high. There's no doubt that these markets are booming. So are you going to invest or sit this one out? Jim Mueller at the Motley Fool says there are three myths that could hold you back. Myth No 1: Prices can only go down from here. "No one can predict the future accurately," says Mueller. "In 1929, Irving Fisher, professor of economics at Yale University, tried when he said stocks had reached what looks like a permanently high plateau. So did an unknown Boeing engineer, who said there would never be a bigger plane built, after the first flight of the 247, which held only 10 people. Even when they are experts in the field, people have a very poor track record of predicting the future. So, if you are worried that stock prices can only go down from here, invest. Twenty years from now, you'll be glad you did." Myth No 2: It's the wrong time to be in the market. "Daily, we hear news stories about how the market is up or the market is down or the market is fearful about higher oil prices. Forget that," says Mueller. "The `market' isn't alive and it has no single reason for the way it seems to act. The `market' is nothing more than the combined trading of thousands of different people, including you and me, making individual decisions about buying or selling. In every kind of market condition, there are many different opportunities. Try to find those opportunities, rather than subscribing to general statements about the `market'." Myth No 3: There's nothing left to invest in. "True, it seems like indexes are setting daily highs. But that doesn't mean every stock is at a super high price. "Remember, an index represents what is happening in a much bigger arena. Just because it is at record highs doesn't mean each member company is. "Indexes cannot accurately reflect the movement of every single company. Surely at least some of them would make good investments, regardless of what the indexes might be doing. "You should tune out the noise and focus on finding the quality companies that you can buy to hold for the long haul," advises Mueller. "Oil up? The Dow down? Not a problem when your focus is elsewhere." Ouch "I don't like country music, but I don't want to denigrate those who do. And for those who like country music, denigrate means `put down'." - Bob Newhart
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4 REPLIES 4
Russ
Super Contributor
Thanks,Cents. I've also found trading to be quite a lot of hit and myth.
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Mic
Super Contributor
I find it very exciting and very stimulating and sometimes very frustrating!!!.
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vusi_1
Contributor
I'LL remember this when i am losing money ... Thanks though..
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trigger
Frequent Contributor
Cents - you do a lot of postings on this forum, do you trade full time or do you have loads of time at work?
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