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Confirm The Market's Trend Before You Buy.(A)(INVESTOR'S CORNER)

Investor's Business Daily

| October 02, 2001 | COPYRIGHT 2001 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: David Saito-Chung

Surf in the middle of the night. Plant tulips in summer heat. Shop for Halloween costumes right before Christmas.

There's a right time to do pretty much anything, and a wrong time too. Buying stocks is no exception.

The right time to get in the market is when it's trending higher.

Fifth in a series

What does that mean? You buy stocks when the major averages are shooting higher like there's no tomorrow. The best time is when the market flashes a strong follow-through and high-quality stocks hit new highs (see Sept. 27 Corner).

When the market is trending lower, your best bet is to stay in cash. Most stocks follow the market's path. After the Nasdaq peaked in March 2000, seven out of 10 stocks on that exchange fell in the following 12 months. Their median loss? A painful 62%.

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