You all know what CYA stands for. Of course,
Cover Your Assets.
And everyone does it. You have protection against
losing your car in an accident. You have
protection against being sued from that car
accident. You have locks on the doors to your home
to protect against theft and personal injury.
Question. Do you have a lock to protect from loss
in your retirement portfolio?
Bet you didn't even know there is one. You sure
aren't going to hear about it from your stock
broker or financial planner. If there is such a
thing why hasn't he told me? Maybe it is because
it is too expensive.
No, there is no charge for this type of protection
and your brokerage company will do it. It is free.
Then why don't brokers and financial planners
provide this as part of their service? The simple
answer is it is too much work. If you decide to
use the service they will then have to watch your
Oh, did he say he was going to watch your account?
Unless your account in seven figures or close to
it you do not appear on his radar screen. The
average broker has 300 accounts. Could you watch
what is going on in each one if you had his job?
It is not possible so there must be a way to
protect your money. Yes, and it is automatic.
When your stocks are going up and you are making
money you don't want to give back those profits,
do you? Of course not. There is a simple method
known to every broker and financial planner, but
you must insist it is done ? or you will transfer
your account to someone who will. Money talks and
he will understand that.
First you must determine what your risk level is.
Are you willing to give back 5, 10, 15% of the
price of your stock when it starts down? If you
say 10% then each week tell your broker you want
an Open Stop Loss Order placed on the closing
price of each Friday (or Monday , Tuesday,
whatever) as it moves higher and not to reduce
This way he does not have to watch all the
different stocks you have in your portfolio and
you are protected against any big losses. He may
not even want to do this and ask you to place
those orders which you can easily do on the
Instead of trying to figure out where or when to
sell your equity you let the price action of your
stock tell you when it is getting weak. There are
many ways of placing Stop Loss Orders and you may
wish to use another method. Many can be found by
using a search on Google by typing in the words
"stop loss orders". Your library should have books
on the subject.
For a person who is working or cannot take the
time to follow the market this is the best way to
protect your investments. Consider it a lock on
your profits. Go back and see how this would have
worked if you had done it for the past 5 years.
You would be money ahead.
CYA ? cover your assets.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy
It!" has helped thousands of people make money and
keep their profits with his simple 2-step method.
Read the first chapter at http://www.mutualfundmagic.com
and discover why he's the man that Wall Street
does not want you to know. Copyright 2005