| |
| |
|
Stocks & Mutual Funds Information |
|
|
|
The Secret to More Winning Trades is as Simple as Avoiding This Common Mistake
If you're a normal human being, your need to feel good about yourself probably causes you to sell your winners too soon - and -- your need to avoid feelings of regret, causes you to hang on to your losers too long. At one time or another, we're all guilty of letting our emotions dictate our investment decisions. But the only way to succeed in the market, is to keep greed, fear, pride and hope away from your trades. The most successful investors know exactly when they're going to sell a stock, the moment they buy it. Often they use "trailing stops" which move along with the closing price of the stock. It's a purely mechanical decision they make as an impartial observer - and never based on feelings or instincts. How many times has "fear of loss" caused you to sell a stock that brokeout the next day? Have you ever "fallen in love" with a stock - "hoping" it would breakout after an initial 10% pullback, only to end up losing your shirt? Has "greed" kept you in a stock where you wanted 50%, not 20% -- only to have the bottom drop out in a week, letting your profit dissolve into a loss? Have you ever held on to a loser because you wanted to prove your initial "instincts" were right after all? By pre-determining the maximum amount you are willing to lose on a stock or fund, you can't really get hurt. Equally important, this simple, proven strategy keeps you in a profitable investment so you don't sell too soon and miss out on profits. In a hypothetical example, let's say you begin with $25,000 in a variety of stocks and funds. The first year was good and you made 25%. Now your portfolio is worth $31,250. You do the same the following year and now your portfolio is worth $39,062. Then the third year you lose 50%. That would put the value of your portfolio back to $19,531 - which is less than you started with. Just one year's loss can wipe out two years of great gains. Now let's say you had used the "trailing stop" strategy during these years... You had the same $39,062 at the beginning of the third year - but - you were using a 15% "trailing stop". As soon as the value of your portfolio dropped 15% to $33,203, you would automatically been stopped out, and would have locked in a profit of $8,203. I'm sure you'll agree, that's quite a difference! Do this with just a few of your stocks or funds, and you can see how you can easily pocket thousands of extra dollars - while simultaneously minimizing your losses. The "trailing stop" strategy is a time-proven tool for completely eliminating any emotions from dictating your investing decisions. The only problem is that it requires a lot of your time and a lot of work on an ongoing basis. If you have 25 different stocks, you may have to make 25 new calculations every single day. The GOOD news is that now there is a new software program that automatically does all the tedious calculations for you. It can prevent you from taking big hits that can hurt you - while simultaneously letting your winners ride. Plus, you can now accomplish all this in about 10 minutes a day. The program, "STOP-Master Portfolio Manager" is a great time saver. It monitors up to 50 positions in your portfolio. It automatically grabs current stock prices off the internet ... recalculates new trailing stop SELL prices as needed ... and completely updates your entire portfolio. When one of your positions hits your pre-determined SELL price, you are immediately signaled with a Pop-Up Alert. Then, simply instruct your broker to sell. No emotions. No needless losses. Greater gains. © 2004 Empire Direct, Inc. All Rights Reserved -- You have permission to publish this article electronically or in print, in your Ezine, on your Website, or in your Ebook or Newsletter as long as the Author's Resource Box is included with the article. About The Author James M. Clay has been a successful investor for over 20 years. He has shown many people how to use this simple technique to dramatically cut their losses, while simultaneously locking in profits. To find out more, please visit: http://www.AutomaticInvestmentProtection.com
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
More Window Dressing Two weeks ago I wrote about what the Securities and Exchange Commission was doing to regulate the mutual fund industry to help the small investor, the "poor folks". It really added up to zero. Patterns The Law of Chaos is the theory of random unpredictable action applied to the cosmos, mathematics, mechanics, almost everything. Those who believe it will definitely think the stock market is in chaotic state at this time. Stock Market Investing: Knowing When (and when not) to Sell One of the greatest challenges of investing in stocks is developing a "sell discipline". Some of the most adept investors struggle with the decision of when to sell. Stops Make Money During the day I watch CNBC-TV, the stock market channel. Fortunately, I keep the sound muted or I would be hollering at the dumb "experts" being interviewed. Bargain Basement - Finding Stocks That Go Up Have you been listening to the talking heads on CNBC-TV? Or those talk radio stock experts? Getting all those good recommendations on what to buy now. Now?Those guys keep telling me the market is oversold. Buy and Hold Investment Strategy "Buy and hold" is one of the most heralded investment strategies promoted today. "Buy and hold" is also one of the few investment methods where you are guaranteed to lose money 2 out of every 5 years. Market Globalization Just 30 years ago the stock market was a shadow of what it is today. There were many fewer shareholders and the daily volume was a fraction of what it is at present. Analyzing Growth Stocks: An Important Focus For Any Investor Analyzing growth stocks is an important focus for any investor. This is especially important, since stocks are an irreplaceable part of any good investment plan, and since unbiased stock research is hard to find. Selling The stock market has been going up for more than 7 months and many investors who held on through the big crash of 2000 are seeing their portfolios get back some of what had disappeared. Is now the time to sell those equities that are 'even' with what you paid for them? No. Seecrets on Investment: Tired of Making Huge Losses in the Stock Market - Part 2 Fundamental analysis.Fundamentals analysis says the best way to predict the future trends of a stock is to understand the financial figures of the underlying company. Bottoms Ups If you have talked to a stock broker or financial planner in the last few days I will bet they all agree that there are some great bargains out there and now is the time to start buying in anticipation that the market will go back up. You will also find agreement from the talking heads on CNBC and those talk radio station stock mavens. Is Your Garage Full Of Junk? I have a 2-car garage. There are nice shelves on one side and a good practical workbench with a vice on the other side. Time Out Are you paying any attention to your retirement savings? Do you have it in cash or an account with a broker? Maybe you have a professional manager who is investing your money as you add to it every month.Is your account increasing in value every year? If it isn't why are you letting anyone else invest for you? There is no point having a loser in charge of your money. Social Insecurity Just about everything you have been told about Social Security is an obfuscation. That is a big word for convoluted truth or lie. What To Buy Now I am sure that if you have a brokerage account with a "full service" broker you have been getting calls about what to buy and sell. If you have big losses in certain stocks you might be hit with that great Wall Street lie to buy more so you can 'Dollar Cost Average'. Trading Education: The Best of Both Worlds! I made my very first investment in the stock market when I wasten years old. Ever since then I have been hooked! Now I checkout hundreds of trades each year with the same excitement andenthusiasm, and each time try to find that one market at theright time that could dramatically create wealth. Investing in Trash Company Stocks Refuse is a serious issue in any society, about as serious as cleaning the water and air, even more so to some degree, especially if you study your history with regards to the plague. This is why it is considered one of the better long-term hold stocks to have in one's portfolio. Hedge Funds You read and hear a lot about hedge funds. Unfortunately, most of what you hear is negative because it comes from the major media that has an interest in reporting negatives about them because the major media is supported by so-called standard mutual funds and brokerage companies that spend big bucks for advertising. Structured Settlement; Lawyers in NY and Mutual Funds Minority Report the movie may not be far off if the Head of the SEC has anything to say about it. At a Senate Banking Committee hearing on CSPAN, William Donaldson said that the beloved SEC can no longer sit back and "mop-up" after scandals break. Is the Stock Market for You? Many people would like to diversify their portfolios to expand their holdings. Making it big in the stock market has been a dream for many people who want to strike it rich.
|
| home | site map |
| © 2006 |