During our travel down life's path we come to many places where the trail divides and we must make a decision. Some involve psychological (emotional) choices ? marriage, divorce, leaving home, career changes, etc. Others are monetary ? buying a new car, home, starting your own business, investing, etc. Many are interwoven having aspects of both psychological and monetary.
The marriage decision means you have decided to live and share everything with a partner and also support that partner in every way including financial.
Investing in anything is at first mostly financial, but as you accumulate a larger and larger amount it begins to have a grip on your emotions. Greed and fear are the two great motivators in the investment community. Everyone wants to buy that $1.00 stock that goes up to $200 per share. Unfortunately, for most, the pot of gold remains at the end of the rainbow. As the years pass by and your investments become larger and larger fear of loss creeps into the subconscious. No one wants to lose.
During the past 3 years we have seen many people lose a great deal of their stock market investments. Both fear and greed have taken their toll. Wall Street has not taught you how to prevent loss and they never will. Until you have experienced losses you go along with the program and too late you realize there must be a better way, another path. Once you have found it you now have the decision to break away from old conventional wisdom. You realize that you have been following the wrong path.
Wall Street's maxims of Buy and Hold, Do Research and Dollar Cost Average have been and still are false. Once you have come to this understanding you will be on the road to successful investing. You will have taken the right turn on the path.
Losing money is not only a financial hardship but also a psychological burden. No one likes to be wrong, but hear this bit of advice about the stock market. It is OK to lose a small amount, but never OK to lose a large amount. Protection of your capital is of prime importance.
Whenever you buy a stock or mutual fund your first consideration should be how much am I willing to lose if it goes down instead of up? You can set that parameter at 5% to 20% of your investment. For stocks you can have the broker put in a permanent stop loss order, but for mutual funds you must set the price and make the call to tell the broker to sell you out. You are on the right path because you are in control. If you do sell with a 10% loss remember you now have 90% of your money remaining so you can find a more profitable vehicle. Ask around to find out how many of your friends now wish they had had one of those stop orders in place during the past 3 years.
The secret pathway to success in the stock market is selling, not buying.
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
After finding the price of a particular stock, usually the... Read More
The World Bank claims that some two billion of the... Read More
You've decided to try your luck at trading stocks or... Read More
When you become interested in a stock or mutual fund... Read More
Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More
One of the great "secrets" of successful people is discipline... Read More
Right now there doesn't seem to be any "gold fever".... Read More
The debate rages all over Eastern and Central Europe, in... Read More
Refuse is a serious issue in any society, about as... Read More
In 1960 an engineer working for a watch company in... Read More
One of the big advertising kicks today from mutual funds... Read More
Economists know more about how the fragments of society work... Read More
Let's say you are interested in this one company. You... Read More
Mutual fund investing is a lot like Thai cooking. Everyone... Read More
Money: the most charged word in the planet. It means... Read More
What does it take to be a stock trader? It... Read More
It is commonly reported that the stock market averages about... Read More
I often hear from people, "I don't trade. I invest.... Read More
The stock market has been in an up trend for... Read More
Minority Report the movie may not be far off if... Read More
The big bad bear is stirring again. So far he... Read More
I was devastated!I just couldn't believe it. I was 10... Read More
Now that you have some money burning a hole in... Read More
The higher the market goes the more confusing are the... Read More
Wall Street's watchword has always been diversification, but what does... Read More
If you're like many investors who squander those small dividend... Read More
Every day on CNBC-TV they show a 200-day moving average... Read More
Any online investor / trader seeks an excellent off or... Read More
"Buy and hold" is one of the most heralded investment... Read More
If you have been dealing with mutual funds for any... Read More
So you're started trading, you bought some positions with your... Read More
The debate rages all over Eastern and Central Europe, in... Read More
There are red lights, green lights, blue lights and spot... Read More
Let's say you are interested in this one company. You... Read More
Well maybe that's overstating it a little, but it's certainly... Read More
Mutual funds are doing more and more to discourage investors... Read More
Before you buy another car you walk around the lot,... Read More
We need a rabbit!This was a pretty horrible week for... Read More
On the 40 year journey through the turmoil of a... Read More
∙ Make every investment in the stock market a long-term... Read More
The trash business in its efforts to cook their books... Read More
I read a comment by a forum member on another... Read More
Spread trading is a technique that can be used to... Read More
Stock trading can be a very profitable activity. You can... Read More
Now where have I heard that before? I know. It... Read More
On Friday or Saturday evening my wife gets a movie... Read More
Every day I hear someone on CNBC proclaim that "this... Read More
If there is one term over-used when talking about making... Read More
I have been trading for several decades and was an... Read More
Before we get into all the good news out there,... Read More
Stocks & Mutual Fund |