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
scheduled cleaning services Winnetka ..How is it possible that trash Companies are posting less... Read More
What can I expect to make my first year of... Read More
Mutual fund investing is a lot like Thai cooking. Everyone... Read More
'Sector funds are too risky.' 'I doubled my money with... Read More
We have two candidates for president that have really different... Read More
People are always asking me when should I sell my... Read More
Sometime in the third quarter of 1997, someone told me... Read More
The bear market that showed up at the end of... Read More
Two weeks ago I wrote about what the Securities and... Read More
Any online investor / trader seeks an excellent off or... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Very few people, even professionals, have heard of the Dalbar... Read More
How do you make money without picking tops and bottoms?I... Read More
The date October 13, 2000 will forever be embedded in... Read More
The Surgeon General of the United States says that smoking... Read More
Every publicly traded company is required by the SEC(Securities and... Read More
Its dinnertime and the phone rings. It's Joe Noname with... Read More
If you have been dealing with mutual funds for any... Read More
There is so much involved in developing peak performance, that... Read More
Both the stock market and oil prices rallied recently, which... Read More
One Saturday morning, while he was sitting at his computer... Read More
Let's hope you did not have any of the Enron... Read More
If you're like many investors who squander those small dividend... Read More
Ever have one of those sample boxes of candy? Each... Read More
How many people went to a cash position this week?... Read More
reliable maid service Lincolnshire ..Ever jumped out of an airplane? It's OK if you... Read More
I was devastated!I just couldn't believe it. I was 10... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
Ever notice how behavior in one area of life can... Read More
When it comes to 401k's there is an overabundance of... Read More
Every stock market investor faces one primal enemy. An enemy... Read More
What does it take to be a stock trader? It... Read More
Sometimes the best way of lowering exposure to risk is... Read More
Day trading is all about making buy and sell decisions.... Read More
Now that you have some money burning a hole in... Read More
Robert Rodriguez likes to buy stocks at their lows. When... Read More
Every day I hear someone on CNBC proclaim that "this... Read More
Are hedge funds a suitable investment for you? Hedge funds... Read More
What! Me worry?Many of you remember the cover of MAD... Read More
I constantly hear the talking heads on CNBC-TV, the radio... Read More
It looks like the market is ready to start up... Read More
The gleam and bright lights of Wall Street lure in... Read More
Every Wall Street analyst, financial planner and broker will tell... Read More
The broker told me not to sell because the mutual... Read More
Options trading can increase the profits you make when trading... Read More
During the day I watch CNBC-TV, the stock market channel.... Read More
For some "long term" would mean holding a stock position... Read More
Mutual funds are doing more and more to discourage investors... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
Refuse is a serious issue in any society, about as... Read More
Stocks & Mutual Fund |