Investors of all experience levels struggle when deciding when to sell a stock
NEWPORT BEACH, Calif. (PRWEB) July 15, 2008
SMARTSTOPS.net today introduced a first-of-its-kind online service to help investors guard against loss and lock in gains by constantly monitoring portfolios for at-risk stocks. SMARTSTOPS.net users receive daily exit price benchmarks, automated exit alerts and a variety of educational and decision-making resources.
Analyzing a range of technical factors for most stocks and ETFs, including volatility, velocity and historical trends, along with an optimal mix of exit methodologies, SMARTSTOPS.net is an easy-to-use, unbiased resource to help investors avoid serious downtrends and improve returns in volatile markets.
"Investors of all experience levels struggle when deciding when to sell a stock," said Brent Collins, CEO of SMARTSTOPS.net. "Whether caused by fear, information overload, lack of interest, emotional attachment or simple time constraints, too many investors let important time-sensitive decisions pass them by as a once-promising stock sinks into oblivion."
The need for a better stock exit strategy is clear for both active traders and buy-and-hold investors, whose current alternatives are either too complex or overly simplistic. Advanced investors using trailing stops are often forced to sell if a temporary decline occurs during a predominately upward trend. And while "buy-and-hold" is widely considered the most conservative and successful strategy over the long term, it can force individual investors to endure extreme volatility. This can be particularly harmful if funds are then required after a stock's value has fallen.
SmartStops can also be a powerful complement to portfolio diversification, a widely accepted approach to managing risk. SmartStops provide an added layer of protection that dynamically responds to market conditions on a daily basis, better managing the downside risk of a well-balanced portfolio.
To demonstrate why more dynamic protection is needed, SMARTSTOPS.net conducted an analysis of the S&P 500 over a 10-year period ending May 2008. It found that:
486 stocks (97%) experienced at least one price decline of 25 percent or more 347 stocks (69%) experienced at least one price decline of 50 percent or more 175 stocks (35%) experienced at least one price decline of 70 percent or more 51 stocks (10%) experienced at least one price decline of 90 percent or more The average price decline experienced was 62 percent "By using SmartStops, investors are alerted when they should consider 'moving to the sidelines' and have a chance to limit their exposure to these price declines," said Charles LeBeau, a renowned exit strategy authority and Director of Analytics with SMARTSTOPS.net.
"Once a stock is sold, investors can reallocate capital to more appealing or stable stocks. Or, they can simply hold it in money market funds to be reinvested once the stock's downward move has ended."
How it works
Traditional stock exit strategies, such as trailing stops, often lead to poor results because they do not take into account the range of market factors that can cause a stock's movement downward. SMARTSTOPS.net, on the other hand, can determine whether a falling stock price reflects standard volatility or if the decline more likely indicates a longer, more significant trend.
To make it even easier for online investors to take advantage of SmartStops, SMARTSTOPS.net will soon announce agreements with major online brokers enabling clients to automatically protect stocks using SmartStops as sell-trigger benchmarks.
"We started SMARTSTOPS.net to provide investors with a solution that is sophisticated in its analysis, yet simple to use and deploy," says Collins. "With SmartStops, investors can make better decisions, removing much of the guesswork of when to sell."
SMARTSTOPS.net offers two primary methods of accessing its sell-protection service:
-- Free On Demand Service: -- Five SmartStops look-ups per day -- Historical charts indicating SmartStops and triggered alerts over varying periods -- SmartStops Portfolio Protection Subscription Services: -- Expanded lookup capabilities -- End-of-day emails with the next day's SmartStops across multiple portfolios -- Historical charts showing SmartStops and triggered alerts over varying periods -- QuickAlerts sent when a stock's price falls to hit that day's SmartStop -- Portfolio management tools -- Subscription pricing -- Free for a 3 stock/ETF portfolio -- $9.95/month for a 10 stock/ETF portfolio -- Additional $9.95 for each next set of 10 symbols All customers can retrieve historical charts, read the SMARTSTOPS.net blog, and access educational and community resources focused on helping investors decide when to sell.
Investors wishing to compare the results of different stock exit strategies over time can review results of back-testing research, which shows SmartStops to have been the superior method.
SMARTSTOPS.net makes it easy for stock investors to maintain advanced, automated sell-protection that helps lock in gains and defend against losses when stocks are at risk. For more information visit http://www.SMARTSTOPS.net or contact info@SMARTSTOPS.net.