If you are the average American investor it means you have no idea what or when you should be buying and selling. Stocks? Bonds? Mutual Funds? Limited partnerships? ETFs (Exchange Trader Funds)? Money Markets?

Any broker is ready and willing to prescribe his brand of snake oil. Notice I left out 'able'. The brokerage houses require their "experts" to stick with the party line and to recommend only what the house wants sold. It might be a new issue or some excess inventory they want to move.

Brokerage houses to this day do not want their brokers to think for themselves or to come up with any creative method to help the customer make or preserve his money. No, that is not what they say, but it is what they do.

History has proven that a knowledge of technical analysis is far superior to fundamental analysis. The fundamentalist studies corporate sales, P/E ratios, gross margins, cash flows, earnings, growth, management's background and economic data. When most of these factors look their best is when the market is at the top and gives fundamental buy signals. When they look the worst is at the bottom and that is when these companies are the best buy - sometimes.

The best signals are given by technical analysis. With today's computers it is relatively easy to follow hundreds of stocks or funds by setting up specialized programs to alert the investor when certain technical indicators are aligning to give investment signals. These parameters are not subjective, but mathematical. One large portion of technical analysis is based upon charting which is very subjective and requires a great deal of applied apprenticeship.

The greatest amount of customer snake oil is made from fundamentals as corporate "facts" are most easily distorted from huge sources of information. It is somewhat more difficult to hide empirical facts especially when placed on charts.

Snake oil comes in many forms, but mostly in beautiful color brochures about their projected performance. Pictures of their offices and equipment. On CNBC-TV there will be interviews with the company CEO who will paint a glowing picture of anticipated performance and profits. Fingers are twitching as the investor wants to write a check to buy some of these magnificent shares. Never listen to the company CEO. Do you expect him to tell you any bad news?

It takes a while to develop a story and have it seep into the pores of broker/salesmen. They are the targets of many snake oil presentations as these are the people who then sell it to you. There is one way to check out the story's facts. Put up a chart on your computer screen that is from one to three years and if it has a price appreciation that is slowly ascending at about a 30 degree angle this one might be a good buy. If it is declining look no further. Pass or sell out if you own any.

Always be cautious. What you might be getting is a big expensive bottle of snake oil.