Your No-Frills Investment Strategy

Gerald Appel

Part I: Picking the Right Investment Vehicles

Successful investing involves two basic areas of decision: what do you buy and sell, and when do you buy and sell.

It’s not how much you make that counts; it’s how much you manage not to lose.

Let’s start by considering just a few numbers. The Nasdaq Composite Index reached an all-time high on March 6, 2000, closing that day at 5048.60. The ensuing bear market took the index down to a low of 1,114.40 on October 9, 2002—a loss of 77.9%. Prices advanced from that point. By December 3, 2003, the Composite had risen to 1960.20—that’s 75.9% above the lows of October 2002. And where did the buy-and-hold investor stand at that point? Down—very much down still, ...