Carmen Mayer with her book “Mommy Goes Millionaire”. Dr. Mayer Consulting GmbH
Carmen Mayer, a doctor of biochemistry and author of “Mommy Goes Millionaire,” prefers active investing rather than buy-and-hold strategies.
Mayer uses technical analysis to avoid big losses and have a clear exit strategy.
Carmen Mayer is known as a stock market expert and coach. The mother of two recently published a book called “Mommy Goes Millionaire.” While the biochemist, who has a doctorate, teaches basic financial knowledge there, she also writes about why she actively invests herself and is not a fan of ‘buy-and-hold’ strategies.
“Spring 2017, Friday afternoon in Munich, Haidhausen. I’m sitting on the couch, heavily pregnant. My husband Markus is on a business trip somewhere. “He travels so much that I don’t even know exactly where in the world he is,” Mayer begins in her book. That afternoon she was looking for suitable properties for her small family. “The search results shocked me,” she writes. Although she was shown many properties, all of which looked beautiful, the prices displayed had “a lot of zeros”. After this shock, Mayer quickly made the decision: she had to deal with the topic of building wealth – and started investing.
Why Mayer doesn’t pursue a ‘buy-and-hold’ strategy
In her book, Mayer explains, among other things, how beginners can get started on the stock market and everything that needs to be taken into account. In addition to basic skills, the investor also describes the advantages of active investing. “Many people ask me why I don’t follow the ‘buy-and-hold’ strategy and always stay invested in the market, but instead regularly check my investments using technical analysis and only invest in upward phases,” says Mayer.
The reason: With the help of technical analysis, she can avoid big losses because she has a clear exit strategy, says Mayer. Which means she gets out of a stock when a certain, predetermined limit is reached. Among other things, it uses the moving average, which shows whether a stock is in an upward or downward trend. This indicator is there to smooth out stock prices in order to better identify a trend.
This is how you can use the moving average for stock analysis
“When you look at stock prices, it may seem like they are constantly up and down,” writes Mayer. However, most of the time a price moves in a certain direction. As an investor, it is particularly important to recognize whether there are “normal fluctuations” or whether the price is currently collapsing. To find out, investors can calculate the moving average (GD), which can be determined over different time periods.