| Most people never forget their first
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| | argumentative, but a long-term view of
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| love. I'll never forget my first trading
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| | the Investment Process eliminates the
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| profit! But the $600 (1970 dollars) I
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| | guesswork and points pretty clearly
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| pocketed on Royal Dutch Petroleum was not
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| | toward a trading mentality that keys on
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| nearly as significant as the conceptual
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| | the natural volatility of hundreds of
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| realization it signaled! I was amazed
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| | Investment Grade Equities. During
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| that someone would pay me that much more
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| | corrections, consider these simple
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| for my stock than the newspaper said it
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| | truths: 1) although there are more
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| was worth just a few weeks earlier! What
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| | sellers than buyers, the buyers intend to
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| had changed? What had happened to make
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| | make money on their purchases, 2) so long
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| the stock go up, and why had it been down
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| | as everything is down, don't worry so
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| in the first place? Without ever needing
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| | much about the price of individual
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| to know the answers, I've been trading RD
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| | holdings, 3) fast and steep corrections
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| for thirty-six years!Looking at scores of
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| | are better than the slow attrition
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| similarly profitable, high quality
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| | variety, 4) always accept even half your
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| companies in this manner, you would find
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| | normal profit target while buying
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| that: (1) most move up and down regularly
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| | opportunities are plentiful, 5) don't be
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| (if not predictably) with an upward
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| | in a rush to fill your portfolio, but if
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| long-term bias, and (2) that there is
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| | cash dries up before it's over, you are
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| little if any similarity in the timing of
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| | doing it "correctly".Most of the problems
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| the movements between the stocks
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| | with Mutual Funds and much of the
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| themselves. This is the "Volatility" that
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| | increased opportunity in Individual Stock
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| most people fear and that Wall Street
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| | trading are functions of growing
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| loves them to fear. It can be narrowly
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| | non-professional Equity ownership.
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| confined to certain sectors, or much
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| | Everyone is in the stock market these
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| broader, encompassing practically
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| | days whether they like it or not, and
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| everything. The broader it becomes, the
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| | when the media fans the emotions of the
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| more likely it is to be categorized as
| |
| | masses, the masses create volatility that
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| either a rally or a correction. Most
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| | rarely under-reacts to market conditions!
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| years will feature one or two of each.
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| | Rarely will unit owners take profits,
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| This is the natural condition of things
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| | particularly if they have to pay
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| in the stock market, Mother Nature, Inc.
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| | withdrawal penalties or taxes. Even more
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| if you will. Don't take her for granted
| |
| | unusual are expert advisors who encourage
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| when she gets high, and never ignore her
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| | investors to move into the markets when
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| when she feels low. Embrace her volatile
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| | prices are falling.A volatile market
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| moods, work with them in whatever
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| | creates opportunities with every
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| direction they travel, and she will
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| | gyration, but you have to be willing to
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| become your love as well!Ironically, it
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| | transact to reap the benefits. A
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| is this natural volatility (caused by
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| | necessary first step is to recognize that
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| hundreds of variables human, economic,
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| | both "up" and "down" markets are forces
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| political, natural, etc.) that is the
| |
| | of nature with abundant potential. The
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| only real "certainty" existent in the
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| | proper attitude toward the latter, will
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| financial markets. And, as absurd as this
| |
| | make you much more appreciative of the
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| may sound until you experience the
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| | former. Most investment strategies
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| reality of it all, it is this one and
| |
| | require answers to unanswerable
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| only certainty that makes Mutual Funds in
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| | questions, in an effort to be in the
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| general (and Index Funds in particular)
| |
| | right place at the right time.
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| totally unsuitable as investment vehicles
| |
| | Indecisiveness doesn't cut it with
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| for anyone within seven to ten years of
| |
| | Mamma... in or out too soon is not an
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| retirement! How many Mutual Fund
| |
| | issue with her. But wasting the
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| investors have retired recently with more
| |
| | opportunities she provides really ticks
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| liquid financial assets than they had
| |
| | her off! Successful investment strategies
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| seven years ago, way back in 1999?There
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| | require an understanding of the forces of
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| will always be rallies and corrections.
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| | nature, and disciplined rules of
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| In fact, it is worthwhile to "go back to
| |
| | portfolio management. If you can
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| the future" to establish a realistic
| |
| | transition back to individual securities,
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| Investment Strategy. In the last forty
| |
| | you will do better at moving toward your
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| years, there have been no less than ten
| |
| | goals, most of the time, because the
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| 20% or greater corrections followed by
| |
| | opportunities are out there... all of the
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| rallies that brought the market to
| |
| | time.So let's adopt some new rules for
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| significantly higher levels. The DJIA
| |
| | this investment game and learn to live
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| peaked at 2700 before its record 40%
| |
| | with them for a few cycles: Let's buy
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| crash in 1987. But at 1700, it was still
| |
| | good stocks new and old at lower prices
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| 70% above the 1000 barrier that it danced
| |
| | during corrections. Let's take reasonable
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| around with for decades before... always
| |
| | profits on those that go up in price,
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| a higher high, rarely a lower low. The
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| | whenever they are kind enough to do so.
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| '87 debacle was followed by several
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| | Let's examine our performance based on
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| slightly less exciting corrections, but
| |
| | the results of these trading transactions
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| the case was being made for a more
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| | alone and at market cycle examination
|
| flexible, and realistic, Investment
| |
| | points for a smiley faced change of pace.
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| Strategy. Mutual Funds were spawned by a
| |
| | And one other thing...Let's drink a toast
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| Buy and Hold Mentality; Mother Nature,
| |
| | to Mother Nature, her uncertainty, her
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| Inc is a much more complicated
| |
| | volatility, and, of course, to our first
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| enterprise.Call it foresight, or
| |
| | loves.
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| hindsight if you want to be
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| |
|
