The unemployment rate in an economy is the number of people who are unemployed as a ratio to the number of people in the labor force of the economy.  Unemployment has a direct effect on the welfare of the unemployed and invariably the economy in which they live.  The Current Population Survey (CPS), which is a monthly statistical survey of about 60,000 households, is used by the Bureau of Labor Statistics (BLS) uses the survey to provide a monthly report of the employment situation in the United States.  The survey is based on responses to a series of questions on work and job search activities, each person sixteen years and over in a sample household is classified as employed, unemployed, or not in the labor force.  A higher unemployment rate provides a signal that the economy may not be using some of its resources efficiently.

The unemployment rate is calculated as follows:

Unemployment Rate = Unemployed / Labor Force

Buy and hold use to be the common phrase at most investment firms. I never really believed it to be the best plan; however, is the idea dead in all investment firms? There are two different thoughts for this topic.

The first thought I have is this method will be dead for the time being. The market took a huge dive, as we all know, and even the most sound stocks have gone down. People will not trust this theory and investors will try a new way to invest for a few years. Then, when they see the market in a bull move for a few years, they will go back to old ways. Getting 8%-10% seems too enticing for doing nearly nothing. The problem is we will always come back to a bear market again. Unless you learned from the first one, you will loose massive amounts of money again.

My second thought is people will no longer adhere to the buy and hold idea.  If their investment adviser does not decide to change, they will be history and the client will move on to someone who adheres to their own investing strategies. An example of a good investor is Gary Kaultbaum. I have mentioned him before on this site. He is a strict investor who only buys companies with growing sales and income. Growth stocks are not risky if strict on selling policies as mentioned in early articles, 8%. The upside is 200% to 1200% gains. That is life changing.

The person who learns form this bull market on money managing will in the future save themselves tons of money. Think if you could have, at worst, cut losses at 8% for all stocks, instead of 20%, 30%, 50% this year. Or even better, listened to people who know what they are talking about and sold stocks before the major downfall. If you are investing your money, it is adivsed you do not simply rely on somoene, but do some homework yourself and keep up to date with the market.

The labor force is the number of people in a population who are of working age and are willing or wanting to work.  Working age is usually above sixteen years old and below sixty-five.  If someone is not looking for work, such as a homeless peddler on the street or a full time student, then they are not considered unemployed because they are not willing or wanting to look for employment.  Also if someone has not been able to find a job and gives up looking then they are considered a discourage worker, but they no longer count as part of the labor force or the unemployed becuase they are no longer seeking employment.

The following equation calculates the labor force:

Labor Force = Employed + Unemployed

The point of a stock journal is to write down exactly what you bought, when to cut losses, and record gains. A journal will help all investors who have a hard time selling loser stocks. As you have noticed, a lot of my articles have this concept in them - when to sell. For many people, this has been the biggest issue to grapple with. If are not strict to this rule of selling losers at 8%, you will lose money more often than not.

You cannot second guess yourself saying, “Well, what if the stock goes up?” This is not okay, this will make you lose more often than not. Keeping a journal will make the line of selling more definite. You could also go on to record what the stock did afterward for the first few times to see what you would have lost afterward just to prove my point.

*Journals can be paper-bound or electronic on the computer.

I am sure most of you have asked the question, “When do I buy stocks?”  There is no easy answer, but a good set of rules is as follows:

1. Buy stocks that are $10 or more
2. Do not be afraid to buy stocks with new highs
3. Buy on pull back days on a monster stock
4. Buy when above 50-day moving average

There are more rules than these, but this is a good set of foundations to help you look at why you are buying and when to buy. Make sure your buy is not emotional, make it factual and based on rules you set before you go into buying stocks. A major issue is people do not make rules and stick to them. You must be disciplened when working with the stock market.