Be aware of investment danger
impatience zaps wealth
When riding a winning stock, doing nothing is the easiest way to make money. Early selling zaps potential wealth that could be yours. Wealthy investors are patient. They let rising stocks add more wealth.
Getting rich or avoiding going broke?
“You never go broke taking profits!” That old adage often gets used to justify selling a winning position. True, selling locks in profit. However, you don’t grow rich taking early profits!
That is the point here. Following the tired old adage will get you profits now but robs you of any possible future gains. To get rich, stay with your winners. Take the full ride.
Far too frequently I have seen people selling winners and holding onto poor or losing positions.
That is backwards; investment danger impatience zaps wealth
The talking heads on TV, too many advisors that “churn to earn” and traders want you to take profits on your winners. That works to put your money into their pockets.
Don’t trade when you should not. Do not sell a winner.
Traders and their facilitators generate most of the very high noise level in markets. They also generate the majority of the revenue for the brokerage houses and exchange. In their worldview all trading is good. It certainly is good for them but could seriously slow the growth of both your portfolio and climb to wealth.
Trading does work well for traders. It also works for those who serve them. We are talking about investing, not trading. When you are investing, any trade taken when you should not, costs you unnecessary fees and all the potential future profit of that position.
All that market racket can make you think I must do something. Naturally, if you ask a trader what to do, “trade” will be the answer.
Adopt this basic thinking guideline: sell positions that show a loss, keep positions that show a profit.
This is not suggesting that you should never trade, hesitate to trade or resist any suggestion to trade. Just make sure that it is in your best interest before you proceed with any trade. When appropriate do not hesitate to make a move. But with your rising winners selling is not appropriate.
Nothing else will improve your investment performance like this simple, easy and very profitable move. Or should I say non-move?
When it comes to managing your rising winning positions the very best thing for you to do is nothing. To grow wealthy you need to do nothing but enjoy the ride on winners.
Think this way; the market does not and can not beat you, however you can beat yourself. Develop the knowledge, think it through, act when needed and be patient with your winners.
Big money is not made by trading. It can be made by riding winners higher. Find, buy and ride those winners! And always remember the investment danger impatience zaps wealth.
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