* Emotionally detached.
Investing is about making money at least risk with emotions detached. We should never fall in love with a stock or a group of stocks.
Some folks say sth like the following:
Every asset/class will return to the average value (say 30 years) with one or two minor exceptions (gold and financial stocks).
When a strategy is used by every one, it will lose its performance.
* Do not risk with money you cannot afford to lose.
One recent retiree lost most of his money in a market downturn and he died due to too much worry. After a year, the market recovered and he got back everything except his life. Besides his wife, Uncle Sam was not too happy.
* Buy when market is bleeding and sell when every one is buying.
Buy low and sell high is the best strategy but it is hard to do so.
* Diversify will give you better mental health. The stock could plunge with unexpected events and/or manipulated financial statements. Diamond and Carnival are recent examples.
* Do not buy sin stocks like tobacco company and casino.
* Do not follow the herd without exit strategy. If you are against the herd, make sure you have good reason to.
The flow to money fund proves the average retail investor is usually wrong in market timing.
-------
(c) TonyP4 2012. Written in 1/12/12. Last updated in 1/12/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment