bi level home remodel cook county garrison colonial remodel adding a dormer to a ranch 2nd floor addition to ranch done right home remodeling .. Chicago Drug testing

Play another Day

Money management starts with protecting your capital, realizing profits and cutting losses. As I have stated in the past, without cash, you can't invest. Cash is king and learning to manage your money is the most important aspect to investing in stocks. The game is won by lowering your risk by properly turning the numbers in your favor. Cutting losses is the best insurance to keeping your cash.

Emotions fuel the decisions of many investors; leading the pack is hope, fear and greed. In order to control these emotions, proper money management skills must be developed through a defined set of rules. How do you know if an investment is working and moving in the right direction? If it shows a profit, you are correct, if it shows a loss, something is wrong and it may be time to protect your capital.

Most investors develop the emotion of hope after a stock has declined from the initial purchase price. They hope that it will rebound and make promises to themselves that they will sell at breakeven. If and when the stock rebounds, they break the promise and become greedy and decide to hold on for a profit instead of selling. Typically, the stock will start to decline and the investor will start to accumulate losses. Investors are full of pride and will not admit that their judgment is wrong, so instead, they decide to hold on and accumulate additional losses.

When a stock is purchased and starts to decline, especially on heavy volume, it is time to admit that you may be wrong and sell before the loss is too steep. If the stock rebounds after you sell, you can always re-enter your position. Cutting losses is the best insurance an investor can have in their portfolio. By developing rules and eliminating emotion, investors can start selecting high quality stocks and buying them at their proper purchase points. This will lower your risk and help prevent you from using insurance. In my previous post, I explained how to develop a watch list of high quality stocks using fundamental and technical analysis.

About the Author

Chris Perruna

http://www.marketstockwatch.com

Chris is the founder and CEO of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We don't stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

In The News:

Picking Mutual Funds to Outperform the Market

With over 6,000 mutual funds available, it may be tempting... Read More

Outsourcing

It's about time someone spoke the truth concerning outsourcing. The... Read More

Political Investing

We have two candidates for president that have really different... Read More

Boiler Room 7/17/00

On Friday or Saturday evening my wife gets a movie... Read More

Investing in the Stock Market - When To!

Is really not as important as to how you invest... Read More

Buy and Hold Investment Strategy

"Buy and hold" is one of the most heralded investment... Read More

Gurgle Gurgle

Caught in a whirlpool and being sucked under. No life... Read More

Wal-Mart: Discount Store, Discounted Stock?

As GuruFocus updates the stock buys and sells of gurus,... Read More

Some Good News for A Change

Before we get into all the good news out there,... Read More

Direction

It is difficult to make money in a bull market,... Read More

Peer Groups

Whenever I see mutual fund comparisons in the trade publications... Read More

Inertia

One of the basic laws of physics is that a... Read More

Complacency Indicator

If you haven't heard of the technical indicator with the... Read More

Leverage - Margin Debt

What is leverage?Here is a definition of leverage from an... Read More

Nest Eggs and Omelets

Do you have a nest egg? You know, a place... Read More

Oil Stocks As A Long Term Investment

The demand for world oil is increasing while world reserves... Read More

Its A Duck

If it walks like a duck, quacks like a duck... Read More

A Funny Thing Happened on the Way to the Stock Market

On the 40 year journey through the turmoil of a... Read More

Mindset

In 1960 an engineer working for a watch company in... Read More

Diversification

Wall Street's watchword has always been diversification, but what does... Read More

Good Stock Market Tip; Good Return!

Forget making a profit; instead focus on the income provided... Read More

The POWER of a Proven Stock Investment Plan

When you invest in the stock market for ever-increasing cash... Read More

How to Evaluate Load vs. No Load Mutual Funds

If you have been dealing with mutual funds for any... Read More

How to Find Value in No Load Mutual Fund Investing

What are you thinking when it comes to your no... Read More

Keep Your Profits

It looks like we have now entered a new bull... Read More

led light bulb replacement wind power street lights Pete's produce ..
led light bulb replacement wind power street lights Pete's produce ..