Why make things complicated? If you have $4000 there is no reason to be that complicated. You do not need to follow stocks or subscribe to major newspapers to invest your $4000. Rather, by keeping it simple and following the data points in the stock market $4,000 invested on Jan 3 2007 would have already grown to $7964.00! That is just shy of a 100% rate of return and it was SIMPLE!
The stock market moves in trends and I use four trends to make what I call a Tornado. A Tornado LIFTS our returns. When the four trends start weakening the tornado dies out and our profits start diminishing. If we can spot the trends as they weaken we can change our investment direction to capitalize on the trend.
Lets keep it simple. I am going to use 2 mid cap ETFs. The two I am going to use are the MVV or the midcap long ETF for an advancing trend. I am going to use the MZZ or the mid cap short etf for the declining trend.
Then, I am going to use the blog at www.myspace.com/investing1 to spot the trend.
Jan 1 to Feb 23 the trend was positive. The MVV grew in value from $79.60 to $90.60 or 13.9%.
On Feb 23rd the trend turned negative and I sold the MVV for the MZZ short. From Feb 23rd to March 15th the market trend was down. The MZZ gained in value from 54.43 to 60.43 or 11%
March 15th the trend changed to an up bias. I sold the MZZ and bought the MVV. This trend stayed strong until July 19th where the trend turned. I sold the MVV for a 22.2% gain. (81.64 to $99.80)
July 19th I bought back the MZZ and sold the MVV. I held the MZZ from July 19th to Aug 23rd when the trend turned again. The gain here was 15.6%
Aug 23rd thanks to the change in trend, I bought back the MVV long index and it is currently up 11.48%
I use 2 ETFs and simply spot the trend as it is taught to me at www.myspace.com/investing1 My $4000 investment becomes $7964.00
It is that simple! I need not worry about finding a winning stock and I need not worry about losing money. I simply have to learn how to spot the trend or read a blog that tells me the trend.