A new direction?

I've always enjoyed the stock market and the economy in general and maybe now is the time for me to start blogging about that (maybe even posting on a regular basis, what a new concept). The only problem is, I'm just a normal investor, I have no pull like an analyst or portfolio manager. But maybe that isn't such a bad thing. You don't see too many average investors posting their experience or their economic outlooks on the internet (unless you are a member of Motley Fool's CAPS program). Well lets run with this and see where it takes us. I can't really be held responsible for anything I say here whether it be a recommendation or my point of view.

To start lets just get together and try and figure out what tools are available at your disposal to make you a more refined and informed investor. I think there are some great free tools out there that can definitely help you along your journey and I highly recommend and use them on a regular basis. First off lets talk about the newest service I have joined, and that is CAPS by the Motley Fool. The site can be found at caps.fool.com and is really a community based recommendation and grading tool. You can add favorite investors and analysts and see how their choices are playing out relative to the greater market. You can also make picks and write pitches as to why you think a certain stock is a good pick, or a bad one. The whole concept is pretty neat and for anyone who has ever invested a little money into the market the whole process should be very familiar. They also have a myriad of tools like charts and all the ratios you could ever want (very handy for some quick research).

The second thing I would recommend doing is finding a broker that fits you. There are tons of options out there when it comes to investing and not one broker can be all things to all people. Personally I use Sharebuilder right now as its dollar based investing option is a decent feature and makes investing on a budget very easy. They also have varying plans for the level of investments you will be making, with up to 20 free scheduled trades a month and real time trades as low as 11.95. Other great choices are Charles Schwab which will provide more of a personal broker feel in that they will make recommendations and have a top notch staff working to make the whole process very easy. There is no initial limit, so again can be used for first time investors, though their interface and tools may be more advanced than many are ready for. I have not had any experience with the other brokers, but just search for one, and I'm sure you'll find something you like.

So, now that you have all that stuff sorted out, I guess you are ready to start picking stocks. Ok good, now that you're listening, ignore what I just said. Why you might ask should you ignore picking stocks and investing your cash right now? Simple, the market is having some major issues right now, and heading into the fourth quarter where earnings are never particularly spectacular will only exaggerate the problems. This is not to say that you should not invest, but that you need to be much more careful than under normal market conditions as it will be very easy to pick solid companies that will lose you money over the short term. This is a great time to find bargains, however! There are plenty of companies out there that are showing good signs of value and bottoming out may be occurring in several areas of the market, though as a whole I think we have a lot more left to give before things start to right themselves.

There are lots of ways of picking stocks that are right for your portfolio, and me not being an experienced investor can only continue to learn from mistakes and research. Some of the things that I find helpful, at least at this point in my life, are Bollinger Bands, logarithmic scaling, and the MACD. All of these features are used to help me figure out the current market trends for that item and also let me choose an appropriate time to buy and sell. None of this is a perfect science, but with the right tools and outlook, and some decent common sense and a lot of luck I have been able to stay well ahead of the market this year without writing too many sales (which is my greatest weakness).

You will make mistakes as you move through investing, I know I have made plenty but I still believe that as I become more accustomed to investing and this changing economy I will be more and more successful. Once I have mastered my fear of selling and really taking the time to track and do things right, I will be in a much better position to maintain my own fortunes as they progress.

Good luck and happy investing!

Some things to look out for:
ITB - I believe this etf is very close to bottoming out, it has been hanging around the $19 for quite some time now (the lower end of the Bollinger Band, how convenient for us). I see this slipping maybe another dollar into the low 18s, but as people begin to rebuild their confidence and the builders start to move inventory on better loans we will see this stock performing at its correct levels of about 40 dollars. (Part of my current portfolio)

PCU - One of my favorites and a company I have invested in personally. This is a high dividend paying stock that has been hit irrationally hard during this last correction. Down from 140 to around 100 in less than a month, this stock to me currently represents a good buy. With their high dividends and great margins this is a good choice for someone with some patience. The world stockpiles will go down over time and the demand will increase because of it, riding this company will net some decent gains! (Part of my current portfolio)

MKL - The one stock on this list that I am still not sure about yet. All the things I read and all the numbers I look at say this is a Berkshire-esque company and their investment team is top notch. The only thing I can't decide on is a good price to buy this company. My gut says buy, and I know I will probably end up listening to it, but I am not going to be afraid if this stock slips below the bands for a while. It is hugging the bottom band like a blankee and I think it may drop to maybe 430 or so before the market is done toying with people. I think this company will make up most of my retirement portfolio in the next couple of years and I can definately see potential in this model.

Cash - Though not a stock, this is definately a safe bet moving into these winter months if you are a little more conservative and concerned with your savings. There is however, the concern of the weakening dollar, and holding straight cash might not net you very much. I definately suggest a money market fund from your broker or even sites like paypal.com who offer decent returns af over 4%. (Part of my current portfolio)

IPO Watch

Visa - Watch out for this IPO, it might be a very nice one for many people. One of the largest IPO's in history, if this follows suit with Master Card there is definitely some money to be made!

Symetra - Whenever this gets to market (I completely respect their decision to stay out until the volatility ends) it will be a great pick. With the backing of Buffett, large product offering and customer base, I can see how this is a top pick for many.