Thursday, February 14, 2013

Ten Commanmdents of Investing #1

1. Do Not fall in love with any stock.

You  read about a stock. It sounds wonderful and after doing your own research you decide to buy. As you buy the stock starts to rise. It rises and rises for a few weeks, months, a year.

The stock becomes the jewel of your portfolio. Ypu look at it sweetly everytime you look at your brokers portfolio page. The stock is praised  in magazines, on television , everywhere stocks are discussed.

You find that you smile with recognition at the sound of its ticker symbol.

Then suddenly the stocks rise stalls.

The prive teeters.

Its price begins to fall. You remain loyal, you know it will come back.  Pennies become quarters, quarters to dollars. You hold and feel physical pain for your beloved stock. You hold and hold.

The price free falls and hits bottom with a bump.

You cannot sell, you feel the stock is unjustly mistreated. You know it will reach the highs again, but no-one else will buy.

You have made a fatal investing mistake. You fell in love with a stock.

Avoid this costly mistake by setting goals for a stock. Those goals can be a percewntage price rise. A percentage price fall. Set automatic sell triggers if you must but always keep your emotion out of your investing.

Happy Valentines Day. Love your sweetheart not your stock.

No comments:

Post a Comment