Expert: Dr. Joseph de Beauchamp - 8/1/2005

Question
After reading about a trading maneuver by the
good guys in a suspense novel, I set down the
book and went looking into info on the internet.
One thing led to another and I found a nice book
about fundamentals and technical analysis. My
question now develops: As a semi-retired person
who is only the equivalent of a $2 bettor at a
race track, how would I participate in the market with a small amount of cash? I'm not
interested in the long run. If a trader is holding a security for less than 6 mos., is he
automatically in futures or options, or are there successful people working with plain old
shares of stock?   Thanks if you can comment.  

Answer
Rick,

With 30 years plus in this business, short term and trading does not work. I could only recommend with small amounts a mutual fund. I do not believe in stock investments, unless a person has over 10 different stocks. I have found that nobody truly has any success with short term trading and takes too much risk to be with fewer than 10 positions.

You should consider a good mutual fund, and look at the stocks in the fund. This will give you plenty of experience. Make up a mock investment using the stocks in the fund. You can trade the mock stocks, and take a year to check out and see if I am correct.

I think you will thank me in the next year for the honest opinion, and this way, you will not loose any money to validate my opinion. You might want to check on the http://wfnn.info site for mutual funds, since you can put $25 per month away without investing anymore than this.

Dr. Joseph de Beauchamp