StockScouter

[3/2/07 Richard Jenkins writes in This Week on MSN Money:] Even if you're a buy-and-hold investor, a market swoon like Tuesday's 416-point drop is bound to get your attention. It may also start you down the risky road of questioning your strategy.

It got me to wondering how our StockScouter rating system performed in the last bear market. (I'm not saying that we're entering a bear market here, just wondering.)

We didn't launch Scouter until the bear market that began March 24, 2000, was well under way. But from Scouter's launch on Aug. 1, 2001, to the end of the bear market on Oct. 9, 2002, it vastly outperformed the wider market indexes. The 50-stock portfolio outperformed the easier-to-trade 10-stock list, but even that eked out a small gain while the major indexes lost from 15% to 28% during the period. (The portfolios turn over monthly to reflect top-rated stocks.)

Here are the numbers:

 StockScouter versus indexes in the last bear market

Top 10 Top 50 Nasdaq S&P 500 Wilshire 5000 Dow industrials
1.6% 10.0% -28.2% -22.8% -21.3% -15.5%

As all savvy investors know, a big part of making money is not losing it. StockScouter was sorely tested in its infancy and came through with a solid, even spectacular, performance. I hope you find it useful in your own investing.

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[2/22/07, Jon Markman writes] Want to get rich? Here's all you have to do: Buy 10 stocks. Hold them for six months. Sell and repeat.

If that sounds too good to be true and you want to stop reading now, I can't blame you.

But that would be unfortunate because this advice is a twist on a strategy that has worked really well for 5½ years, through hell and high water. Or at least war, recession and flood.

If you follow it in a low-cost trading account, particularly one in which gains compound tax-free, then there is a distinct chance -- though not a guarantee, of course -- that you could make serious, life-changing money.

Of course, you can't just buy any old 10 stocks. They've got to be the ones ranked at the top of the class by MSN Money's StockScouter rating system. You have to be ready not just to buy them at times when you think it is a terrible idea, but also be ready to sell when you love them so much you can't bear the thought.