A.I.M. Users Bulletin Board

[SFSecurity]

Hi Toofuzzy, The reason for going to the trouble is that hype is the most common element of investing. The goals, in my mind, are to be informed about the history and prospects of any investment.

Peabody Coal, anyone? Or Washington Mutual, Inc. - I worked for them as an information security analyst and thought it likely they would be in trouble at some point. Sure enough 3 or so years later, bankrupt. Then there is Enron. The signs were there, I've been told, if one were to be diligent.

IYR is just one example of an ETF that could slide dramatically and it would take one years to recover one's loses.

Another reason to look closely is that measures like you suggest, "...the 13 crosses the 30 day ma." are around in the thousands. Some say 40/80 ma, others say 10 ema/30 ma, still others say 50/100 ema, an then there are those who talk MCAD, On Balance Volume, and who knows what else or whether they are of any real value.

You've said, "buy what you like," but what if one liked General Motors Corporation? What would have happened to them in 2009?

I don't "like" any company, ETF, bond, etc., per se. I do tend to avoid spending any time on ones that I think are damaging our health, economy or environment as a first screening and then I want to know if they are likely to lose traction should we hit another down market. Then there is the Growth versus Value question. AAII has a short article about that subject this month.

Anyway, enough rambling. It just seems to me it is smart to understand as much as possible to reduce risk.

Best,

Allen