Buy, Hold, and Sell!. Moraif Ken

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      Ken Moraif

      Buy, Hold, and Sell!

      Buy, Hold, and SELL!

       The Investment Strategy That Could Save You from the Next Market Crash

      Ken Moraif

      Cover design: Wiley

      Copyright © 2015 by Ken Moraif. All rights reserved.

      Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

      Published simultaneously in Canada.

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       Library of Congress Cataloging-in-Publication Data:

      Moraif, Ken.

      Buy, hold, and sell!: the investment strategy that could save you from the next market crash / Ken Moraif.

      pages cm

      Includes index.

      ISBN 978-1-118-95149-1 (hardback); ISBN 978-1-118-95151-4 (epdf);

      ISBN 978-1-118-95150-7 (epub)

      1. Investments. 2. Retirement income– Planning. 3. Investment analysis. I. Title.

      HG4521.M837 2015

      332.6– dc23

      2014036990

      For my mom, who taught me how to save and invest, and made me who I am today.

      Acknowledgments

      I want to thank:

      Money Matters' beloved and most valued clients.

      The astute, inquisitive, and engaged listeners of my radio show.

      The patient, long-suffering, and dedicated Cindy Brown, who put up with all of my quirks and calendar issues.

      My three wonderful daughters, who never hesitate to criticize me and keep me on the straight and narrow.

      And always, my beautiful, talented, and supportive wife Fay.

      Introduction

      One Bear Market Can Change Your Life Forever

      How would you feel if you lost over 78 percent of your retirement investments in one bad market?

      I'd been doing a weekly radio show for four years when I was asked to speak at the “Managing Your Money” conference in Arlington, Texas. After my presentation to some 4,000 attendees, I walked offstage to find a man in his late fifties waiting for me. He said, “Ken, glad to meet you. I listen to your radio show every week.”

      “Thanks,” I said, shaking his hand.

      “Do you know how much money I had before this last bear market?”

      This was 2002. The tech bubble had recently burst. I was afraid this was going to be a sad story. “No,” I said, “how much did you have?”

      “Three million dollars.”

      “Wow, that's great,” I said. “Congratulations.”

      “Do you know much money I have now?”

      I shook my head, bracing myself.

      “I have $650,000.”

      I remember looking at the man. I couldn't believe he was standing, let alone smiling. “But tell me,” I said, “To go from $3 million to $650,000, you had to see your investments drop to $2.5 million, then $2 million, then one and half…There were signposts along the way. Why didn't you get off the ride?”

      And he said, “I had every intention. I planned to get out if my investments ever dropped down to two and a half million. But when they went down that far, I thought to myself, ‘I'm down $500,000. I can't sell now. That'd be ridiculous.’”

      I had the feeling I knew where he was going.

      He continued: “So I drew a line in the sand: If my investments went down to $2 million, I'd sell for sure. But when they sank to that point, I did the same thing. I said to myself, ‘Oh no, I'm down $1 million. I can't sell now, because the market will come back. I don't want to be the fool who sells at the bottom.’”

      He went on. “Everybody was telling me that the market was going to bounce back. I didn't want to miss the rebound.” He shook his head. “I never got out. I rode the market all the way to the bottom, and lost more than 70 percent of my money.”

      I wanted to say something encouraging to this poor guy, so I said, “I admire your ability to smile.” I meant it.

      “I could smile, or I could cry,” he said. “I choose to smile.”

      The Inspiration behind This Book

      I don't want you to end up like that former millionaire. I want you to smile because you're playing with your grandkids, perfecting your golf game, or dancing on the beach with your spouse. I don't want you to have to go through the pain of losing the retirement you've earned. You worked hard, and you've looked forward to this time in your life. I want it to be the best time in your life. I want your retirement to be like your second childhood without parental supervision.

      And I want to help you get there. I want to convince you of the need to buy, hold, and SELL. In today's financial world, you face volatile markets, huge deficits, and even the risks of governments going bankrupt – all of which add up to the possibility of huge losses. With those prospects, I think it's just plain irresponsible to simply ride the market. You need to have a proactive plan that includes a sell strategy.

      But it's not easy. You've probably heard the same advice the unlucky investor followed. “The market will come back. Don't be the fool who sells at the bottom. You don't want to miss the rebound.” It's popular advice. If you Google “investment advice,” you'll probably find information that tells you to “hold forever”