5 Pantangs When It Comes To "Long Term Investment"




When it comes to long-term investment...


1) What’s the point of saying “I’ll just hold for long-term” when in fact it’s actually a failed and miscalculated short-term speculation?



2) What’s the purpose of holding long-term onto a stock if someday it ran into a huge problem like credit crisis and need to issue more shares to raise capital thus diluting shareholders’ value?



3) What’s the use of being persistently stubborn and adamant with what you thought is right when the majority and time has proved you wrong?



4) What’s so great of a 100% return of your stock investment if it takes ten years to achieve? After all, it’s actually only 7.2% annual return, not to mention the inflation rate that you have yet to take account. (Assuming no dividend)



5) What the hell were you thinking when you say “It’s alright for me to buy high, since it’s going to reach higher in the long-run”?



25 golden rules on trading taken

Rule 1: Bulls, Bears Make Money, Pigs Get Slaughtered
It's essential for all traders to know when to take some off the table.



Rule 2: It's OK to Pay the Taxes
Stop fearing the tax man and start fearing the loss man because gains can be fleeting.



Rule 3: Don't Buy All at Once
To maximize your profits, stage your buys, work your orders and try to get the best price over time



Rule 4: Buy Damaged Stocks, Not Damaged Companies
There are no refunds on Wall Street, so do your research and focus your trades on damaged stocks rather than companies



Rule 5: Diversify to Control Risk
If you control the downside and diversify your holdings, the upside will take care of itself



Rule 6: Do Your Stock Homework
Before you buy any stock, it's important to research all aspects of the company



Rule 7: No One Made a Dime by Panicking
There will always be a better time to leave the table, so it is best to avoid the fleeing masses



Rule 8: Buy Best-of-Breed Companies
Investing in the more expensive stock is invariably worth it because you get peace of mind



Rule 9: Defend Some Stocks, Not All
When trading gets tough, pick your favorite stocks and defend only those



Rule 10: Bad Buys Won't Become Takeovers
Bad companies never get bids, so it's the good fundamentals you need to focus on



Rule 11: Don't Own Too Many Names
It can be constraining, but it's better to have a few positions you know well and like



Rule 12: Cash Is for Winners
If you don't like the market or have anything compelling to buy, it's never wrong to go with cash



Rule 13: No Woulda, Shoulda, Couldas
This damaging emotion is destructive to the positive mindset needed to make investment decisions



Rule 14: Expect, Don't Fear Corrections
It is not always clear when a correction will strike, so expect and be prepared for one at all times



Rule 15: Don't Forget Bonds
It's important to watch more than stocks, and bonds are stocks' direct competition



Rule 16: Never Subsidize Losers With Winners
Any trader stuck in this position would do well to sell sinking stocks and wait a day



Rule 17: Check Hope at the Door
Hope is emotion, pure and simple, and trading is not a game of emotion



Rule 18: Be Flexible
Recognize and be open to the unexpected shifts in the market because business, by nature, is dynamic, not static



Rule 19: When the Chiefs Retreat, So Should You
High-level executives don't quit a company for personal reasons, so that is a sign something is wrong



Rule 20: Giving Up on Value Is a Sin
If you don't have patience, think about letting someone who does run your money



Rule 21: Be a TV Critic
Accept that what you hear on television is probably right, but no more than that



Rule 22: Wait 30 Days After Preannouncements
Preannouncements signal ongoing weakness, wait 30 days to see if anything has gotten better before you pull the trigger to buy



Rule 23: Beware of Wall Street Hype
Never underestimate the promotion machine because analysts get behind stocks and can keep them propelled in an up direction well beyond reason



Rule 24: Explain Your Picks
Buying stocks is a solitary event, too solitary in fact, so always make sure you can articulate your reasoning to someone else



Rule 25: There's Always a Bull Market
It's OK if you have to work hard to find it, just don't default to what's in bear mode because you are time-constrained or intellectually lazy