You must take the time once a month to review your investment portfolio. It won't take long - less than one hour, maybe 15 minutes.

I don't believe the average working person or business owner should own anything but mutual funds because these are the easiest to buy and evaluate. However, if you do own some stocks the first thing to ask yourself is if each issue is selling for more than you paid for it. If it isn't you must realize this is not where you want to have your money so the best course of action is to sell it NOW and put those funds into some other stock or fund that is going up. You may have a stock you bought 3 years ago and it has risen only 10% or 25% and you can't decide what to do with it - keep it or sell it - because it has been going sideways for a long time. It might go up. It might go down. Call your broker (a discount broker, I hope) and place a 10% good-'til-cancelled (GTC) stop-loss order. Each month review your stop and move it up (never down) if the stock has risen. This way you don't have to think about it and the market itself will tell you when you should be out.

Stops make you money! Brokers almost NEVER recommend stops especially when they want you to buy something. If it goes down they say it is a correction and "it will come back". But when? Remember how they were touting Boston Chicken at $35 and $40 per share? Today it is 50 cents per share.

It is my strong opinion that very few people have the ability to pick winning stocks. I've been trading more than 30 years and I'm right only 50% of the time. Even when I was an exchange member for 17 years and floor trader I would put in a stop as the same time I made the purchase.

If your portfolio is not making a better return than the S&P500 Index you would be better off having your funds in something like the Vanguard Index500 mutual fund. You will then be staying even with the market as a whole.

There are some basic things that move a particular stock. According to a recent study, 49% of the movement of an individual issue is due to the sector in which it resides: technology, financial, automotive, real estate, etc., 31% is due to the general direction of the market itself and only 20% is due to the quality of the company. In other words owning stock in a great company doesn't mean the stock will go up. The whole group must find favor with institutions, banks and pension plan buyers. They move the market.

Easier said than done: you have to be in the right place and at the right time to see your stock go up. That is why you must take the time to review your invests once a month to keep up with any changes that might be necessary.

Al Thomas

Albert W. Thomas has spent most of his life in the field of finance. In 1965 he founded an insurance holding company, Security Dynamics Investment Corporation, after having been an agent and General Agent for several life insurance companies. In 1970 he became cofounder and president of Real Life Estate, Inc., that marketed a unique real estate and life insurance package.

After he became interested in commodities he bought a seat for his personal trading on the Chicago Open Board of Trade, which is now known as the MidAmerica Commodity Exchange. Later he became a full time trader and also acted as a commodity broker for a few select clients. By fellow floor traders Al is considered to be an excellent technical analyst much of which is outlined in his book IF IT DOESN'T GO UP, DON'T BUY IT! It became a best seller on Amazon.

In 1981 he sold his membership on the Exchange and with his wife, Carolyn, lived full time aboard their 41' ketch, the Aumakua (which means guardian angel in Hawaiian). They sailed in Florida and the Bahamas for two years.

He founded World Trading Group in 1984 that grew to the seventh largest introducing commodity brokerage firm in the U.S. with 35 offices from coast to coast, Alaska and Canada. It was sold in 1992.

Al is a graduate of Northwestern University with a B.S. degree in Commerce and is a member of MENSA. He is now president of Williamsburg Investment Company that syndicates his weekly financial column since 1999 to more than 300 newspapers and writes a financial market letter called Over My Shoulder that is quoted in Barron?s and many other publications. A 3-month trial subscription is available on his web site. He is a regular guest on several financial radio talk shows.

His favorite pastime is fishing.

Mr. Thomas is available for speaking engagements. Please call 321-453-5300 for more information.