Investor homework piles up facts and profits. Series Part 7 of 7. Patience and homework, your two biggest investing tools, piles up facts and profits. Patience lets you wait for opportunity and enjoy the long ride to prosperity and financial security.
How to play a stock price dip covers dips as excellent buying opportunities. Part 6 of the 7 Part Playing Market Odds series. Think of a stock price dip as either good or bad depending on the context. Buy the good, sell the bad. A good dip presents a gift of profit but a bad one vaporizes capital. So, yes, do buy good dips. It can be a very profitable strategy. We just need to buy the right dips and sell or avoid the wrong ones. To sort that out requires us to establish some guidelines. Price dip triggers: News – the facts change, Rumor – true or false, Opinion – analysts or large investor, Fatigue – shareholders tire or give up, Trading – indifferent, sloppy or emotional.
Yes to dips but no averaging down! Part 5 of the 7 part White Top View series: Playing Market Odds. Do not play high risk odds, do not average down…but buy the dip! Yes to dips but no averaging down! Successful price dips purchases and price drops that happened without any sign of significant recovery were examined. The problem comes when averaging down does not work. Get it wrong and you have to deal with a very costly mistake. Sometimes stocks do fall in a hole and never climb out. Sometimes a stock ridden down never recovers. Stocks die.
Misses, writeoffs, bad math and distracted investing. Last post discussed the first three of the 6 Sins of new investors: 1. News based investing = bad news! 2. No research and 3. The high cost of holding losers. In this post we discuss the next three sins: 4. Buying turnarounds or bankrupt companies can bankrupt you! 5. Averaging down sinks portfolio performance and 6. No distracted investing, keep eyes on the road to your financial future! This is Part 2 in the 7 Part White Top View series, Playing Market Odds.