NO options nohow – danger for new investors! Options have no place in the portfolio of anyone new to investing. You must master investing basics before you consider looking at or using any derivative. Options are a type of derivative. Derivatives are financial creations “derived” or based on a real asset. They are bets on a future price for the underlying asset. Extreme losses can be quickly realised when you get ahead of yourself while learning to invest. Getting into derivatives too soon can be a danger to your wealth.
Every 6 months you must be weeding your investment portfolio. Keep good holdings, eliminate bad positions. Regularly scheduling performance reviews achieves your investing goals faster. Mark your calendar so the reviews do not slip by.
Seeing Fed brilliance in action! Part 2 of 3 Ben Bernanke and the U.S. Federal Reserve Bank will self-liquidate well over $1.3 trillion massive mortgage inventory by simply letting the bonds mature. That great pile grows larger at the rate rate of $85 billion more each month!
“Don’t let a good crisis go by” Winston Churchill. Get ready to load up! Stock market opportunity unfolds as the politicians fiddle in front of us. Or do we grab a bag the beans and run for the hills?
“Follow your instincts. That’s where true wisdom manifests itself” – Oprah Winfrey”Follow your instincts. That’s where true wisdom manifests itself” – Oprah Winfrey Oprah is right and investors can benefit by being open to her advice. Following it can help grow profits and avoid losses. Instinct is our subconscious mind working for us. We must listen as well as use it to think and act. Over 2,300 years ago Greek philosopher Aristotle laid the foundation of logical and scientific thought.
For investing success, control actions – use emotions! As an investor, emotions are as intimate to you as your heart or brain. To be the best investor you can be, you absolutely must control your actions, your behavior. Do not waste a scintilla of time or an iota of energy attempting to control your emotions. Rather control your response to emotions – your actions. Your very useful emotions help you. A seismic shift in investor thinking has been under way for a very long time. Now going mainstream, emotions are being acknowledged as a core part of the investing behavior of humans. In fact I should more correctly present the topic as the psychology of humans making financial decisions.
Profits are for growing not for protection! Let profits grow, they are for growing not for protection! You invest to profit. Don’t kill your performance by selling winners and buying losers. Use this as part of your core portfolio growing strategy to get rich. Investors must manage their portfolios to grow their wealth and achieve financial security and independence. Actions taken to protect gains can kill the possibility of dramatic portfolio growth. Don’t move to protect a gain too soon. Let profits run.
Investor watch lists and toe holds can accomplish much. Watch lists or model portfolios enable risk free monitoring but for best performance I use toe holds. Putting skin in the game serves to focus my attention.
Portfolio portion measurements or the percentage dedicated to each investment and the effect that inevitable changes have on those portions needs attention.
Costs drive investor position sizes. Minimum positions for affordable costs keep costs per share low. Investors know minimum position sizes for affordable costs. This second sizing factor gets the transaction costs right. This effectively puts a financial barrier or threshold in place for owning an individual share position.