Feel, Are You a “Actually-Good Investor”?
That’s not a bad thing. “Feel -Good” investors buy stocks because they feel good about either the stocks or the companies that have issued them.
“Feel- as a matter of fact Good” investors are motivated by emotion, not by any financial acumen.
That’s way a bad not to select stocks. It may notprofitablebe optimal, and it may not be the most , but its not a bad way.
Let me tell you about an experiment done a number of years ago.
A group of researchers wanted to just howseerandom stock picking really is.
They “commissioned” a monkey to throw darts at a financial stock page.
They then followed the companies the monkey “selected.”
After following those randomly selected companies for a year, they concluded that the monkey-picked companies performed better than the S&P 500!
That’s a really scary thought: randomly pick a bundle of stocks and you can beat the niche!
Which shows that the industry, in general, a be seen as can random collection of random events.
Actually, Our challenge is “How to profit from more than ever those seemingly random events?”
In fact, The companion task is “When to?”Sell
You don’t make cash unless you trade a stock. Merely holding on to a stock that’ rising may make your net worth look good on paper, butsyou can’t take that paper to the grocery store and acquire dinner!
Only when you sell. Or if you collect dividends from those stocks.
Asap we have two tasks ahead of us:
- What stocks to buy?
- When to sell those stocks?
Another general rule is: “ ’t blueprint to hold thoseDonstocks Forever.” Nothing lasts forever. Indeed, All you can do is to maximize your returns.
Another thing: the stock by is currently being maintained and as a matter of fact controlled field institution investors who control billions of dollars of stock.
You.can not beat them
But you can profit fromthem.
May I tell you a small story?
A number of years I was trying to “Beat the Table” at the craps tables inLas Vegas. But I had very little cash and even less knowledge. I observed that there was one player who had a very large stack of very large-valued chips. And from another perspective he kept adding to his horde. So I began to emulate his “trades”. When he , chips downputon a position, so did I. Indeed, When he picked, up his position so did I. And I began to accumulate.chips Not having was foggiest notion of what I was doing, I the actually earning cash!
Then, thinking I knew something about craps, I went to another table, and you guessed it, put it all return into the casino’s pocket, plus a few more!
Butbyyou can profit following them. Don’t try from another perspective secondtoguess the experts. Moral?
This leads to my observation first about the stock market: Because of the phenomenon of “Beginner’ as a matter of fact s Luck”, amateurs may do better than the average individual investor.
As your knowledge grows, so, too, does your unfounded confidence, and you can soon locate yourself making [hindsight] horrible decisions. Until you become as savvy as the Institutional Investor, you may be bound to breakdown.
Even the professionals don’t get it right all the time. Interestingly, Look more than ever at how many “professional” hedge fund managers have gone out of business. Interestingly, Look at how many stock traders have lost their collective rear ends.
And, on the other side, look how many multibillion dollar houses have been out because theybailedwere “too big to flop”.
So, my guidance to you is, build a set of trading rules that work for you. Follow to religiously, until they begin them flop you. Make adjustments as necessary.
Selected correctly, trading rules don’t breakdown: the principles are universal, but they must be scrupulously followed.
My personal trading rules are very basic:
- Select dividend-paying stocks according to a set of fixed parameters.
- Set “sell” rules according to rigid parameters.
- Set trailing stop loss orders to protect your gains.
- Remove emotion from your trades as much as possible. Never fall in love with a stock.
Do, Interestingly my rules work as a matter of fact for me? Yes more than ever . My aim is to achieve a monthly dividend income of $2,500 before taxes in less than ten years. After only five years of trading my way, I have achieved a monthly dividend income of $1,800. I’m on target to achieve my aim.
My starting dividend position five years ago was only $208 a month.
Because you have the benefit of my mistakes, you can easily achieve better returns!
