So, what is a buy or sell discipline? For some people, their buy discipline is simply blind dollar-cost averaging every month, whereas the sell discipline consists of rebalancing every year and reallocating to bonds according to a specific schedule as retirement approaches.
For others, buy and sell discipline is determined by the cross of moving averages. For others, buy and sell discipline is based upon buying when stocks are cheap according to Rober Shiller's PE10 and selling when stocks are expensive according to the same metric. Some people employ more complex rules and combinations of rules.
The point is this: Whatever your buy and sell discipline is, you must stick to it. Sure, you are allowed change your system over time -- if and only if you have studied the matter carefully and you think you have found a better one. However you may not change a buy or sell discipline on the fly - ever. A change in buy/sell discipline can only lead to an actual trade execution after a "cool-off" period has been allowed to elapse
If you do not have a buy or sell discipline, then you need urgently stop everything you are doing in terms of trading and investing. It is imperative that you do the proper research and adopt a buy and sell discipline that you commit to and adhere to religiously.I happen to think that it is more likely than not that the major stock indices such as the S&P 500
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV