System Traders Charge through Bear Markets

Some comments <a href="http://online.barrons.com/article/SB125366162755932153.html?mod=BOL_hpp_dc">yesterday at Barrons</a>:

Investors are now faced with a dilemma. It is difficult to put new money to work after the market has rallied 60%, but that is what many, again including me, said 10% and 20% ago. The trend still points up. Michael Covel, proprietor of a Website bearing his name and author of the recently published Trend Following (FT Press), says he would tell interested stock investors still on the sidelines to "go for it" because the trend is up. "But if you do get in," he adds, "you better know, before you put your hard-earned capital to work, how much you can afford to lose. No one can control how high or low the stock market will go, but you can control how much you are willing to lose." Trend followers let the market tell them what to do, and that means they realize that trends do not last forever. Trends can turn on a dime. So just because an investor takes the plunge today based on a rising trend, this does not guarantee any profits at all. However, over time, following the trend has been a good strategy.
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More from Michael Kahn <a href="http://quicktakespro.blogspot.com/">here</a>.
 
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