With buy-and-hold almost dead and day-trading still too risky, average investors are being forced to use alternative strategies to make money in this slowly recovering stock market.
The result is something of a hybrid in which investors are becoming more flexible and making more short or medium-term trades to reach their long-term goals.
As sentiment grows that the market hit a lasting bottom in March, there's eagerness not to miss any sharp moves to the upside.
"You can't be a trader because that's too dangerous, and you can't be a buy and hold, because things we thought were absolutely safe are broken," says Michael Kresh, president of M.D. Kresh Financial Advisers in Islandia, N.Y. "You have to be somewhere in between. You have to be a conscientious long-term investor, somebody who is making decisions and designing portfolios not on day-to-day actions but on trends."
Investors, for instance, shouldn't pile back in the market because of one day's economic data or ratings change in a particular stock. That's for day-traders, who buy and sell quickly in large quantities and use sophisticated software and strategies to plot their maneuvers.
Though portfolio managers still recommend sticking with goals that encompass a three- to-five-year time frame, the way to achieve them has taken on a new look. more...
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