ACCESS REALMONEY
Apprenticed Investor
Take Responsibility for Your Stock Losses
01/08/08 - 03:55 PM EST
- Article Tools
- Email this Article
- Print this Article
- Rss Feed
- Related Articles
- 20 Ways to Stop Losing Money in 2008
- 13 Things You Wish You'd Known in 2007
- 10 Ways to Improve Your Market-Timing
- 10 Ways to Build Trading Discipline
- Ten Roadblocks to Profitable Short-Selling
- Del.icio.us
- Digg
- StumbleUpon
I've overheard people complain that they lost money because Alan Greenspan raised, lowered and/or left rates unchanged. Oh, and Eliot Spitzer, too. Well, folks, I've got some bad news for you. None of those are the reason any of you lost money. The dirty little secret is much simpler. You lost money because you bought a stock, and that stock went down, and then you sold it. Period, end of discussion. Buying high and selling low is a lousy investment strategy. Worse is buying high and not selling at all as (paper) losses mount. Think of Lucent (now Alcatel-Lucent ALU) or Sun Microsystems JAVA or Nortel NT, or the slew of stocks that went to zero. Too many people rode 'em all the way down, rather than admit a mistake and take responsibility. You see, with responsibility comes a natural tendency toward planning. If you buy without a plan in place for when things go south --- when your original thesis turns out to be wrong -- then you are at fault. Sorry to be the bearer of this bad news, but the sooner you start accepting that simple truth, the better off you will be. Why? Because all of the excuses above are foreseeable events that only investors (and fools) fail to anticipate. Analysts can be wrong, TV is about ratings, insiders sell, and talking heads talk. Is that a surprise? Hey, guess what? The Fed
raises and lowers rates, the FDA pulls drugs, and attorneys general prosecute.
Review some of the aforementioned complaints, and you will see how foolish they sound. Now try this one: I lost money because I made a bad investment. I lost a lot of money because I made a bad investment without a contingency plan for when things went wrong.
The best way to win this year is to staunch the bleeding in your trading accounts.
Investors who paid attention during the last year gained some valuable insight that could help them make more money.
Tough markets are the most often traded, so being able to time your entries and exits is important.
Discipline is the cornerstone of profitable trading. Here are 10 ways to help bring some more into your life.
Shorting is not the same as going long, so be aware of the problems one can encounter.
Yahoo! is among the most searched stocks on TheStreet.com. Here's what Cramer had to say about the stock recently.
Catch up on his thinking on the hottest topics of the past week.
Investors will have to deal with a Fed meeting and another flood of earnings and economic data.
Ensco International and Echelon have the potential to move higher in coming days.
See who made what calls.
The addition of video is helping telecom companies compete against cable and satellite companies.
The June West Texas Intermediate contract reflects selling pressure ahead of Tuesday's expiration. But stocks in the sector are generally trading higher.
See who made what calls.
Keep on top of the market and the critical information you need to make more profitable investing decisions.
Sponsored by:
RSS
