1) The moment a stock disappoints you or makes you wish you hadn't bought it, sell it. Immediately and regardless of price. Life is too short to hope a bad decision reverses itself.
2) Don't get In or Out of the market, but modulate your exposure up and down as a function of what you think is happening. Your guess based on all the available news and indicators is as good as anyone else's – and it is more important than anyone else's for sure because it is your money on the line;
3) You should be willing to take a 20% drawdown on every dollar you have in the stock market. Obviously being down 20% is not the goal, but it's the reality – it can happen at any time. It's not a permanent loss but you need to invest as though it could be;
4) Don't buy stocks trading over 30 times earnings or under 7 times earnings – something is wrong in both cases. Stay away from anything that is trading near to zero value like those super penny stocks awaits for the Singapore Exchange imposition of pending delisting due to persistent poor corporate results and in terrible state. Avoid the 52-week low list – a loser is a loser;
5) Sell any stock with a controversial development or red flag no matter what. Let someone else be the hero that swoops in on a mispriced, misunderstood security. You can cheer them on from the safety of the sidelines. Earnings restatements, auditor resignations, massive unexpected earnings misses, filing delays, fraud allegations etc are all automatic sells. Let's not act like there aren't other stocks to choose from in the stock markets;
6) Remind yourself about the difference between investors and traders: Investors make trades when necessary, traders make trades in the course of doing business – that is what they do for a living and your goals are different than theirs. You don't get paid out on closed positions or a daily profit & loss statement. Don't try to be a trader unless that's going to be your full-time gig. Trading as a hobby is not the same as being a trader – and it's less fun than you might think. If you've decided to become a trader, find a method and stick with it until you can do it regularly.
7) Look, the stock market always goes up given enough time. It is very hard to find a decade during which returns were negative. Stocks go up three out of four years and declines of twenty percent peak-to-trough are extremely rare (declines of 50% are even rarer still and are always a buying opportunity). Patiently awaits for the both extreme of OVERSOLD & OVERBOUGHT region to conduct your equities investing. So for new or smaller investors, the name of the game is to stay in, do smart things while you're in and avoid blowing up your investing capital;
8) When you finally do become wealthy, hire other people to do this for you and watch them. Go about enjoying the short time we all have left on earth away from the screen. Kiss your kids and play tennis and read books and get drunk during the day and go for long holidays for a month and buy that car you drove in high school – fix it up and take your sweetheart for a ride. Don't spend that time reading about inverse correlations between oil prices and the stock prices or the German bund yields and the gold ratio....etc.
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