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WORDS OF WISDOM FOR THE DAY : Ground Rules For Successful Investing....!

 

Up to about 20 years ago, share investing was purely in the domain of the wealthy.The ground rule is that if you want to be a successful investor in financial markets, you must educate yourself about investing. Even if you put your faith in a licensed investment advisor, not all are competent. It is essential that you understand how the financial markets work so that you do not put your hard earned money in the hands of an incompetent advisor who is only interested in the commissions available. How can you tell whether a particular investment is right for you? The only sure way is to become familiar with the language used in the financial industry and to have a sound investment strategy. Does this mean that you should keep you money safe by putting it under the bed or keeping it in the bank? No – but you do need to understand the risks involved and set ground rules for successful investing.

There are a number of ground rules in investing that haves stood the test of time. With time, patience and effort you can become a successful investor in all the areas that are open to you. This will not come overnight and you will have to be prepared for that fact there will be times you lose money. However,perseverance is a virtue above all others. The road is not always easy, but nothing worthwhile is. Here are the ground rules for successful investing:

1. Be your own investment manager. No advisor or stockbroker should do it for you. Only you know what your real needs are, what your temperament is – and only you are motivated by your own best interests, not sales commissions. It is also more fun to do it yourself.

2. Confront risk and then reduce it through spreading your investments.

3. Take a contrarians view to investment markets. That is, look for opportunities and do the opposite of what everyone else is doing. If your investing facts are out-of-date, how will that affect your actions and decisions? Make certain you don't let important investing information slip by you.

4. NOW is the best time to start investing. Do not wait for the markets to improve. If the share market is filled with gloom, that is the time to buy.

5. Make good quality shares the core of your investment strategy. Then you can rest easy when you invest in more speculative areas.

6. Keep up to date through reading the financial papers and searching independent investment research websites.

7. Discussing investments is stimulating. Condition your mind to talk to others about investing, especially people who are more experienced and knowledgeable than you are.

8. Do not be greedy. Discipline yourself to cut your losses with bad investments and cash in when you have made a reasonable profit.

9. Be patient. Rome was not built in a day. Similarly, you may not become wealthy overnight, but you will over time.

10. Never invest in anything you do not understand. If a particular investment sounds too good to be true, it usually is.

11. Pay yourself first. Most people invest money they have left over after paying the bills. Allocate yourself the first 10% of your monthly income to build up your investment capital. By doing this you will force yourself to become an investor and the long term benefits will be enormous.

If you master these 11 ground rules, you will be a successful investor. You will rival so-called professionals and will sleep easily at night knowing that money is the least of your worries.

WORDS OF WISDOM FOR THE DAY : Swing Traders And Quantum Physics....!

Swing trading is a short-term trading strategy that involves holding positions for one to several days. It differs from day trading in that day traders, by definition, must close out their day's positions prior to market close. As such, they do not carry overnight risk. Swing traders have a longer time horizon of several days, and will accept the risk of holding positions while the market is closed. Swing Traders confidently enter the market with high probability trade set ups that produce profits in a matter of a few days.

Swing trading relies upon the stock market's natural tendency to move in a non-linear fashion. Stock prices, or the prices of any traded security for that matter, do not move in straight lines. They tend to make a move higher or lower, consolidate for a period of time, then continue the prior move. In the case of an upward trending stock, it will reach new price highs and then pause to consolidate it's gains. That push into new high territory is referred to as a "swing high" and its subsequent retreat during the consolidation is called a "swing low." A swing trader wants to purchase the stock as it returns to the upward trend, after completing the swing low. They want to trade the swing, hence the name.

A similar process is followed for stocks in a downtrend. Most good swing trading systems incorporate both a bullish and bearish outlook, allowing a trader to position trades for differing market conditions and to diverse their portfolio of trades. While all prudent swing traders utilize stop loss order to prevent any one trade from creating a sizable account loss, some swing traders will also have a pre-defined profit stop. A profit stop will take them out of the trade once the stock reaches a pre-determined price level. Other traders will hold their position so long as the trend continues, relying upon a trailing stop loss or similar device to take them out of the trade once a counter move occurs.

The concept behind swing trading is simple, but not one easily implemented. The one factor that most separates successful swing traders from those who suffer long-term losses is a strong money management system. Unfortunately, the majority of traders fail to develop or implement this critical aspect of a sound swing trading plan. Good money management requires establishing a pre-defined exit for each position before it is opened, so as to limit losses when an anticipated swing does not materialize or reverses prematurely. Beyond limiting losses on a losing trade, sound money management must also take into account the profit side of the equation and allow successful trades to mature sufficiently so that profits are sufficient to out pace losses and produce an acceptable return.

One of the best swing trading systems that I have reviewed, stages the profit exit so that successful trades result in a guaranteed profit while still allowing for unlimited upside potential when a stock is really prone to move favorably. This allows a trader to move a position of their trading capital out of harm's way and avoid the emotional struggle of trying to determine whether to "let their profits run," or to "take their money off the table."

WORDS OF WISDOM FOR THE DAY : When You Aim For Perfection, You Discover It’s A Moving Target.....!

 

Many traders try very hard to always be right. If the market shows that they are wrong with a loss, they work very hard to turn that loss into a profit. They may average down on a losing position or just hold the stock after their stop price has been exceeded with the hope that the market will turn around and turn their loser into a winner. It is the pursuit of perfectionism that causes us to ignore that trading stocks is a matter of probability. Trying to always be right leads to failure, for eventually, one of those losers fails to turn around and gives the trader a portfolio crushing loss. 

WORDS OF WISDOM FOR THE DAY : Walk The Talk....!

Words, good words, wisdom words....they are nothing more than just words unless we actually LIVE BY THEM ! Our greatest human challenge is to behave according to our beliefs, to do the right things, to practice what we preach and to WALK THE TALK...

COMMITMENT - Fight the temption to compromise your values and beliefs - it will make you stronger;

HONESTY - Build a reputation as someone who tells the truth - it will serve you well;

CHARACTER - Hold yourself to high standards and continually evaluate the image you see in the mirror - it will build your strong character;

RESPECT - Treat others with dignity and make sure your behaviors are respectful - it will make you a person of quality;

COURAGE - Follow your conscience instead of "following the crowd" - it will make you heroic;

INTEGRITY - Choose rightness over ease and convenience - it will give you pride and peace;

I think we all have a little voice inside us that will guide us, if we shut out all the noise and clutter from our lives and listen to that voice, it will tell us the right thing to do. Believe that walking the talk matters because it does. Believe that you can make a difference because you can. You have a choice to start each new day with a commitment to do what is right. Remember that with every sunrise comes new opportunities. Today you have a clean slate upon which to record your life and your legacy. Seek the courage to do the right thing. Decide that this will be a day in which you walk the talk !

WORDS OF WISDOM FOR THE DAY : The Crowd Is Bargain Hunting In What Was; The Knowing Are Buying What Will Be....!

Choosing the right investments is important for long-term financial security. Stock markets are increasingly complex and volatile. In addition, the Internet and 24-hour cable news have meant an explosion of information, which makes it difficult to discern the good information from the bad. By getting rid of certain preconceived notions and doing careful research, you can avoid mistakes and generate higher portfolio returns. If you are going to invest in stocks here are some ideas on how to avoid making a bad investment. Making mistakes when investing can cost you money.

1) First make sure to research the company your looking to invest in. They should be a low to medium risk of return on investment. When you select a stock you should be looking at excellence in share price. You really don't need to pay attention to the overall markets . Markets fluctuate over time and have trading channels that the markets stay in for some time. Look for the value of the company and the long term outlook. Corporate earning should be consistence and you need to realize not all quarters can be profitable but most should be.

2) Try and stay away from low quality securities when you first start out buying stocks. A good investment portfolio should contain blue chip stocks, with good dividend yields. Dividends are very important for your investment and the stocks long term return. Your stock portfolio should contain a good mixture of income and growth securities. Keep your long term stock and let them perform for you,don't buy and sell the to frequently. You can get taken in by short term market trends and sell a good stock that is down because of the lousy market.

3) If a stock has performed well over the years don't run for the exits just because there is some selling pressure. Smart investors wait for a bottom to be put in a but the stock. Don't get impatient and buy stocks out of boredom this is a big mistake new investors make. You should create a portfolio of safe stocks. If you do that and buy high quality stocks and diversifying your investments you will be profitable in the long run. Look at companies that have been paying a dividend over a long term. Wait for the stock to form a bottom and buy it, do get anxious and buy it to soon just do your research and you will be more successful at trading stocks.