As investors, one of the most difficult things to do is to keep an open mind. Rather than let your feelings interfere with reality, you should avoid trying to have too strong an opinion on where the market may be headed and you should just let the facts on the ground (or in this case the trading floor) determine how you will manage your money.

I know there are many reasons to feel cautious about stocks going forward, but there is no denying that we now have seen the major market averages breach their critically significant 200-day moving averages. The breaking through of this technically significant barrier can be seen in the chart here of the S&P 500 Index.

Technically speaking, this breakout is one big bullish harbinger for stocks going forward. And while some may argue (correctly, I might add) that the fundamentals in the economy and on many corporate balance sheets still are shaky, there’s no denying the objective reality that stocks are back above both short- and long-term technical resistance.

One of the pearls of wisdom that I received from my father, Dick Fabian, was that when the stock market is above its 200-day moving average, there is a very good chance that it will continue moving higher. That’s simple advice, I agree -- simply beautiful advice.

Another thing that my father taught me is that when investing, you must always look at the worst possible outcome. So, if you were to make a move into stocks now that we have breached the 200-day average, and if you place a stop-loss order in around 7-10% below your purchase price, the worst that could happen would be you’d lose that 7-10%.

I don’t know about you, but I say if you aren’t willing to take that kind of small risk as an investor, you probably don’t belong in the stock market.

Recently, subscribers to my Successful Investing advisory service received a new buy recommendation based on the movement of stocks above the 200-day average. If you’d like to find out how exactly we are playing the market’s latest move, then I invite you to check out the service now.