American Association of Individual Investors (AAII) - Madison Subgroup of the Milwaukee Chapter

In its 8/10/09 issue, Business Week presented this quote from a Vanguard test to measure clients risk tolerance: ". . . choose among three portfolios that produce an ever-widening range of results at the end of one year for a $10,000 portfolio. One produces a loss of $164 or gain of $593, another a loss of $1,020 and a gain of $1,921 and a third produces a loss of $3,639 or a gain of $4,229." Our September 16, 2009 meeting will give you the tools to make an intelligent choice among these three possibilities, a choice that does not depend on how risk averse you are.

Description: As individual investors, we may employ trade and risk management tactics that cannot be used by large pension and mutual funds. For example, we can invest in small-cap stocks. Better yet, individual investors can manage to never lose more than a very small predetermined amount on any one position. Our September meeting focuses on these and other risk management measures for active investors. Every investor from those who trade daily to those who meet with their investment advisors on a quarterly basis will benefit from good trade management tactics. Risk management entails more than diversification and rebalancing. With good trade management, you may find that diversification and rebalancing are unnecessary. James B. Cloonan in his May 2009 AAII Journal article on the Model ETF Portfolio on page 31 says "We will not make trades solely for the purpose of rebalancing, except under unusual conditions."

Scott Bassler, our speaker will introduce you to trade and risk management strategies used by professionals. Key tactics covered by our speaker include proper position sizing, technical indicators to help boost the probability of selecting good entry and exit points, determining target and exit points before investing, and more. We all know that you cannot time the market. However, using some technical indicators as part of your trade management strategy will greatly increase the probability of achieving enhanced profits and decreased loses.

Attend the September presentation to learn:
- Basic risk management strategies to help manage trades.
- Trade management from pre-entry to exit profit taking.
- Position sizing based on amount at risk.
- Stop and conditional orders.
- Technical indicators that help maximize gains and minimize losses.

Speaker's background: Scott Bassler is the Regional Brokerage Consultant across the North-Central region. His primary responsibility is to educate traders about the tools and services that are provided by Fidelity Investments. Additionally, he conducts local seminars on educational topics, including fundamental and technical trading, research and options, market mechanics, and trading software.

Prior to Scott's current role, he was one of the top performers on the Active Trader Inside Sales Team. He was also an Equity and Options Trader for Fidelity's Active Trader Services Group. His responsibilities included trading, portfolio oversight, and risk management as he worked to assist Fidelity's most sophisticated retail traders. Scott graduated from State University College at Buffalo, New York with a Bachelor of Science in Financial Economics. He holds numerous professional certificates including Series 4 – Registered Options Principal; Series 7 – General Securities Representative; Series 9/10 – General Sales Supervisor; Series 55 – Registered Equity Trader; and Series 63 – Uniform State Law.

September Meeting Summary:
Topic: Trading Strategies for Managing Risk
Speaker: Scott Bassler, Regional Brokerage Consultant, Fidelity Active Trader Services
When: Wednesday, September 16, 2009 at 6:00 PM
Check-in: Begins at 5:30 PM
Cost: No charge, free and open to the public
Where: Sequoya Branch of the Madison Public Library