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INM Dec 2010 - Sticking To A System For "Above Average" Returns
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
CANSLIM.net


The investment world includes lots of tempting ideas. Bullish as the action in stocks has been during some periods, it is humbling to hear when throwing darts, or letting a monkey pick stocks, yielded results that beat many expert money managers. One challenge that we have faced in past bull markets is that many individual investors dismiss the need for a broker or advisor during such strong markets, opting to manage their portfolio on their own with a discount online firm. These examples we occasionally hear about illustrate that making money in the stock market is pretty easy in a bullish market environment.

What we are doing at Source Capital in Lighthouse Point, Florida is sticking to the method which still offers the best potential for "above average" returns.  Investors we are hearing from often need to make up for bad mistakes which have cost them dearly in the past. Some of the stories we hear are gut wrenching.  If there is one saving grace we have, we are able to move more swiftly and concentrate capital more specifically than mutual fund managers which are universally over-diversified. We also manage risk and limit losses better than any undisciplined investment manager who lets losses grow, rather than containing the damage.  If you are considering your options and contemplating changes to your investment accounts as 2010 draws to a close, think about giving us a call and discussing your goals with us.  Hopefully, we can help you get headed in the right direction in 2011.     

Home - Where The Heart Is Not
A large number of people I hear about are still struggling with losing investments in real estate which are down more than -7% from their purchase price. While disciplined investors following CANSLIM know that "Rule #1" is to always limit losses while they are small, it is especially heartbreaking to know that making the monthly payments on those properties continues to feed growing losses of enormous size. 

A neighbor that works at the Post Office just yesterday told me the story of his co-worker, near retirement age, who had co-signed on a mortgage to help her daughter several years ago.  The house they had put a $20,000 down payment on is now upside down by more than $200,000. The biggest concerns and fears she has, after working hard for a lifetime and being a caring parent, is that because of her co-signing on the daughter's loan, her credit rating may be destroyed and the bank may pursue her for the investment assets which she still anticipates will be needed to live on during retirement.

I wish I had an answer for these situations, but there is little I can say or suggest.  My belief is, whatever the investment is, you should never lose big. If you realize you have made a mistake with an investment, do not delay in correcting it.  Do not let a big loss keep growing bigger.  

Roth IRA Conversion Time? 
Investors whose taxable incomes are down in 2010 from prior years might be in a position to make a strategically wise move of funds from a Traditional IRA to a Roth IRA. This kind of maneuvering had become increasingly popular in recent years while the valuation of their regular IRAs had been beaten down and thus there was not as much of a tax penalty for making the conversion to a Roth IRA.  It is worth considering still, especially if you expect that your retirement nest-egg might grow considerably in the years ahead through wise investing, as the later withdrawals from the Roth IRA will be non-taxable income. This may require a good understanding of your tax consequences and the help of your tax preparer. It is a good time of the year to be considering it, and we are hearing an increasing number of requests for the forms to make the conversion.

About Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net :
Kenneth J. Gruneisen has successfully completed the CAN SLIM® Certification Program.  Mr. Gruneisen became a Registered Representative in 1987 and his career includes experience offering personalized assistance to investors with more than a decade of experience as a Registered Principal managing a branch office.

The recommendations made by CAN SLIM® certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.


Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.

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The recommendations made by CAN SLIM® Certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil + Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil + Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.

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