Beware ‘rules of thumb’

Article Excerpt

Here’s an excerpt from a recent issue of Advice for Inner Circle Pro Members: “Early in my investment career, I developed a keen interest in what we called “investor rules of thumb.” Here are some random examples: “Stocks trading at a P/E ratio of 10 times per-share earnings or less are good buys.” “As January goes, so goes the year.” In other words, if the stock market goes up in January, it will probably have a gain for the year, as a whole. “When a stock rises and its volume of trading expands as well, it’s likely to keep rising.” The downfall of all market indicators is that they entice you into basing a decision on a narrow range of information. This simplifies your decisions, but disregards the fact that many factors influence stock prices. The most powerful factors change continually and abruptly.” Click here for more information on Pat McKeough’s Inner Circle Pro. In addition to our top three picks for 2021, we look at how…

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