Well, not really. What I mean is I don't mind losing a small amount when I have to sell a stock or mutual fund that is going down or taking away the profit I have made. During this past 3 years I have made money each year because I was not afraid to sell. The great secret that Wall Street does not want investors to know is all about selling, not buying.
The recent headlines scream"10 Stocks To Buy Now", "100 Best Mutual Funds For 2003", "Make 25% With These Safe Stocks" and "Now Is The Time To Buy". All are either stupidity or wishful thinking. Brokers and financial planners don't want you to find out that they don't know either so they come up with great stories about the equities they recommend. Unfortunately, when the stock or fund heads down it becomes one of those buy and hold situations and they tell you that you are "in for the long haul" and "the market always comes back". I hope that by now you have learned this is not true.
When there is a secular bear market, as I believe we are in now, it could be many years before we get back to "even". Last year 96% of all stock equity mutual funds lost money and the average fund lost 21%. These are times when the only safe place for money is in cash ? a money market account. For the previous 3 years money in your mattress outperformed the stock market by 40% and for lots of folks much more. Here is one your broker will not tell you ? Cash Is A Position.
The first thing you must learn about investing is how to protect yourself from losses. I mean big losses. When I was a floor trader on the exchange I lost on about 40% of my trades, but I never lost much. I came to love those little losses because I still had almost all my money available to find a better position. One that would make money.
Almost all of the magazine writers, talking heads and brokerage analysts are professional losers. It is easy to prove because they never tell you where to sell what they are telling you to buy. If you don't go in with a plan to protect your money it is like a general who goes into battle with no plan for retreat should he find he couldn't win the battle. One of the simplest money savers is the 10% stop. It you buy a stock or no-load mutual fund you should not take more than a 10% loss. This will leave you with 90% of your money that could find a real winner. The small losses will never break you. It is sitting with a loss that gets bigger and bigger and bigger is the one that will ruin you.
Learning to love the little losses will make you rich.
Al Thomas
Author of "If It Doesn't Go Up, Don't Buy It!"
Never lose money in the stock market again.
http://www.mutualfundmagic.com
Culver prom limo ..When you invest in the stock market for ever-increasing cash... Read More
There are formulas for just about everything, but it has... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Three little pigs went to the market to stock up... Read More
I use the P/E ratio as a secondary indicator for... Read More
There is no question that the stock market is being... Read More
Where is the beef? Or maybe it should be where... Read More
In 1960 an engineer working for a watch company in... Read More
There are many good penny stock investments available, which could... Read More
Every day I hear someone on CNBC proclaim that "this... Read More
Among the largest forces that affect stock prices are inflation,... Read More
It is commonly reported that the stock market averages about... Read More
You have decided to buy some stock or mutual funds,... Read More
For years investors have been taught to look into the... Read More
Regardless of the fact that the world's stock markets have... Read More
Cat or dog? Maybe Zebra. Shucks, I don't know, but... Read More
You should ignore analysts on TV, the radio, the newspaper... Read More
That sounds like good advice doesn't it? Don't lose all... Read More
I was recently interviewed for a press release through a... Read More
Should the market turn against you, it is important that... Read More
Caught in a whirlpool and being sucked under. No life... Read More
Several times each month I am solicited by various market... Read More
This is a rather simple strategy with which I am... Read More
Wouldn't it be nice if you were only in the... Read More
A Guide to Using Stop Loss Orders Stop losses are... Read More
Wood Dale limo ..It seems that every day I turn on the TV... Read More
Sometime around 1980, can't remember exactly, there was a flight... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
Duck! No I don't mean a quack, quack. I meant... Read More
I don't know what kind it is, but I saw... Read More
Someday you may want to retire and continue to live... Read More
To begin, you might look at playing the stock market... Read More
Hello Inflation, it has been awhile, I see you on... Read More
Sometime in the third quarter of 1997, someone told me... Read More
Success in small cap & micro cap stock trading like... Read More
Did you run out to buy that duct tape yet?... Read More
The thinking process of the brain relating to the... Read More
Since I can remember, and that's a long time ago,... Read More
Just 30 years ago the stock market was a shadow... Read More
One of the things people are always asking me is... Read More
The stock market has been going up for more than... Read More
When it comes to stock market trading it PAYS to... Read More
Mutual funds were moderately successful in creating a presence in... Read More
How many times have you said to yourself, "I'd like... Read More
For weeks, no, months we have been bombarded with nothing... Read More
We need a rabbit!This was a pretty horrible week for... Read More
THERE'S SOMETHING TO BE SAID FOR standing firm in the... Read More
This is a guide to the different types of mutual... Read More
One of the great "secrets" of successful people is discipline... Read More
Mutual funds by definition are a mixed bag of stocks,... Read More
Stocks & Mutual Fund |