When it comes to buying a stock or mutual fund most people act pretty quickly. There are some who will take the time to get a report from Morningstar (it is worthless) or get reports from their broker (also worthless) or even do a search on the Internet (if you know what you are doing). When your broker says "buy" you buy and when a friend gives you a "tip" you buy.
Any fool can buy. It is the wise man who knows how to sell. One of the old masters of the market Bernard Baruch used to say, "I sell too soon", but he died a multimillionaire.
There is a reason folks are slow to sell. They fall in love with their position and know all the reasons why they should hold on. "My broker said it will come back". And pigs can fly.
With all these symptoms that have turned into syndrome diseases like acid reflux for which there is one of those purple pills to cure you in a hurry. When you buy a stock or mutual fund that doesn't go up or, worse yet, goes down we need one of those purple pills. People have contracted Inertia Syndrome.
The symptoms are terrible. Each day as you look on the financial page of your paper and see your stock has gone down another point your stomach begins to act up and you need one of those pills. You keep putting off going to the doctor (broker) to tell him to sell so your symptoms will go away, but you don't. Things continue to get worse and worse until your money is almost all gone. Then you decide to sell. By then it is too late. What should you have done?
When it comes to your health you can change your diet and stop eating all those lovely sweet gooies that have no nutrition. When you own a stock like that and you lose sleep the best thing to do is to get rid of it. Maybe you have a profit and you are seeing it disappear. There is a way to relieve yourself.
Most people don't know when to sell so the best thing to do is have the market tell you. It is very easy. The first rule for making money in the market is to cut your losses short. As soon as you buy any stock or fund you must decide how much you are willing to risk. Five percent? Ten percent. Fifteen percent? That number should be calculated from the closing high of the move or never lower than where you bought it. If you paid $50 per share your risk should be no more than $5.00 per share.
To overcome Inertia Syndrome put the medicine in play as soon as you buy your position by using an Open Stop Loss Order. By limiting your risk you will never have a really bad belly ache.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
cheapest limo Akin .. Lockport Chicago limo O’HareYou may have wondered why your mutual funds have been... Read More
Hello Inflation, it has been awhile, I see you on... Read More
∙ Make every investment in the stock market a long-term... Read More
We have two candidates for president that have really different... Read More
If you were to find that you had some severe... Read More
If you have talked to a stock broker or financial... Read More
Should the market turn against you, it is important that... Read More
From the book 'The Stockopoly Plan' by the author Charles... Read More
There can't be many traders who haven't at least considered... Read More
Are you attracted to the idea of being in control... Read More
Intervention. Now don't let that big word scare you. The... Read More
A Guide to Using Stop Loss Orders Stop losses are... Read More
I am hearing predictions by brokers, financial planners, talk show... Read More
Now that you have some money burning a hole in... Read More
Today we are inundated with tons of information about the... Read More
Stock trading remains a very competitive field and the stock... Read More
It has fallen upon the consumer to make our economy... Read More
As GuruFocus updates the stock buys and sells of gurus,... Read More
Carefully thinking through your goal as a trader is of... Read More
Ever have one of those sample boxes of candy? Each... Read More
If you have been watching the stock market at all... Read More
Exchange Traded Funds (ETFs) are a group of passive index... Read More
For the last 12 years we have seen the Japanese... Read More
I am sure that if you have a brokerage account... Read More
Stock trading can be a very profitable activity. You can... Read More
Aledo wedding limo ..Invest in the stock market for the RIGHT reason, using... Read More
As an investor you will want to check out any... Read More
One of the big advertising kicks today from mutual funds... Read More
The big bad bear is stirring again. So far he... Read More
Every day in any financial publication you will find the... Read More
One of the great "secrets" of successful people is discipline... Read More
I read a comment by a forum member on another... Read More
It's about time someone spoke the truth concerning outsourcing. The... Read More
Hello Inflation, it has been awhile, I see you on... Read More
Before they go over the cliff to their destruction these... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
I often hear from people, "I don't trade. I invest.... Read More
You've decided to try your luck at trading stocks or... Read More
Why? Because I am going to shatter your conventional wisdom... Read More
In 1960 an engineer working for a watch company in... Read More
A 'stock option' is a contract between two parties giving... Read More
Dollar cost averaging is one of the most popular ideas... Read More
One of the basic laws of physics is that a... Read More
Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More
Have you bought any mutual funds this year or late... Read More
The demand for world oil is increasing while world reserves... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
It looks like we have now entered a new bull... Read More
Carefully thinking through your goal as a trader is of... Read More
With all the bad news that has been dumped upon... Read More
Stocks & Mutual Fund |