Stock Chart Reading

As an investor you will want to check out any equity before you buy it. Many investors go to Morningstar which is one of the largest providers of mutual fund information in the world. It is assumed that their information is correct. After all that is what you are paying for.

Recently the SEC (Securities and Exchange Commission) called them on the carpet for not correcting an error within a reasonable time (whatever that is according to the SEC). Everyone makes errors and this was no big deal.

It seems that when you went to their site and drew up a chart or asked for statistics on Rock Canyon Top Flight mutual fund it failed to notify the potential buyer that the fund had issued a very large dividend of approximately 25% and the NAV (Net Asset Value) dropped from $15 to $11 to reflect the $4.00 dividend.

When you ask for a chart of this fund on MarketWatch, Yahoo, TheStreet or Bloomberg they only post the NAV and do not make any adjustment for the dividend or capital gains distributions. Looking at the chart it appears the fund fell out of bed. Because I look at so many charts I knew immediately that this was a distribution and not some calamity. It is best to call the fund to verify this.

Most funds that make dividend and capital gains distributions usually do so in December, some in November and very few at other times during the year.

Some nitpicker called the SEC and made a complaint about Morningstar. Not that I am a big fan of them (in fact I think their reports are worthless) they get their price information from other sources such as the above. If you are not familiar with the requirement of mutual funds to disburse their profit before year end you might be fooled when you see the price suddenly drop.

This is important for potential investors. I caution everyone to get a chart on the Internet of at least a one year performance of any mutual fund before buying. It is better to go back to year 2000 to see if the fund manager was able to keep from losing money during the last 4 years. Almost none of them could so they bamboozle about how they did better than the S&P500 Index which had a huge loss of 50% and remains down 25% from those highs at this time. Don't fall for that one.

Once again I caution that any purchase should have an exit plan. One of the basic rules of investing is never to lose a lot if you are wrong. Small losses will not ruin your portfolio, but big losses can ruin your retirement. Set your loss limit (5%, 10% or ?) and stick with it.

Charts can help you with buying/selling decisions, but check out their accuracy as charting is not an exact science.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Zacks Releases Four Powerful ''Buy'' Stocks: HSN, Inc., Tiffany & Co ... Zacks.com ... beat the market and provide a positive return. My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank. and more »

Bells Will Ring At The Bottom in Stocks and Housing Benzinga That stocks/mutual funds beat other investment asset classes over the long haul. What seems "impossible" now--that people will repudiate these core beliefs ... and more »

NPWZ: Spec Buy on Fuel Cells Zacks.com ... beat the market and provide a positive return. My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank. and more »

The Stock Market As Propaganda Benzinga ... between the bottom 40% with few financial assets and the top 20% with the vast majority of the assets) own stocks/mutual funds worth more than $10000, ... and more »

Piqqem Sentiment Shows Bullish Signal as it Breaks Thru 30 Day Moving Average piqqem.com (blog) Piqqem tracks sentiment on all securities including stocks, mutual funds, ETFs, and major market indices. The Piqqem sentiment scale runs from 100 on the ...

China's inflation nightmare Moneylife Personal Finance Magazine However, Osian officials claim that a major chunk of the redemption amount would Current events, Stocks, Mutual Funds, Spending, Insurance, Borrowing, ... and more »

Don't put all eggs in one basket Business Standard He can invest the amount in stocks, mutual funds, or a mix of both. Investing a large sum in stocks: The first thing any wealth manager will suggest is ... and more »

Morningstar 4Q Net Down 25% On Charges, Rev Rises Surprisingly Wall Street Journal The company--which provides data on stocks, mutual funds and similar vehicles--also reported a surprise increase in revenue, after posting declines the rest ... and more »

BEFORE THE BELL: US Stock Futures Down After Fed Rate Hike Wall Street Journal The company, which provides data on stocks, mutual funds and similar vehicles, also reported a surprise increase in revenue after posting declines the rest ... and more »

Investment research center available at Robbins Arlington Advocate By Anonymous Access comprehensive up-to-date financial information on stocks, mutual funds and exchange-traded funds through Morningstar Investment Research ...