trading for the long-term. Is that an oxymoron?
We donít think so. We would all love to grab a 5 or
10 percent return on our money each day. Itís note going
to happen. Running a marathon foot race is more about
finishing than anything else.
Rephrased, itís about managing their resources. Many
runners start out too fast.
They may be the first off the starting line but they
burn out a couple of miles later because they didnít manager
their resources for the long term.
This past Spring we heard stories from friends in the
Some investors by this past May were down $250,000
A broker friend shared of the client who had to cancel
the contract for his $1 million dollar custom built house
because the full amount of the home had effectively vaporized
from his brokerage account.
The goal is to not only finish the race but to finish
it in style.
Many arenít even finishing the race.
How do we get to the finish line in style?
Not only how do we get there in style, but how do we
accomplish this in the shortest possible time.
The answer lies somewhere between the extremes.
You donít buy shares of a stock and not give them a
second thought for 40 years, because you might be broke, or
you more likely have earned a passbook return on your capital.
And you donít buy shares of a stock and sell them 60
seconds and a sixteenth of a point later, because 4 out of
5 day-traders lose money.
The successful path to the highest possible account
balance, in the shortest possible time, with the ability to
finish the race with style, is a model like the Stock Traders
This isnít just a self-serving comment but an observation
of real life investors.
Buying a stock that is likely to return a 10, 20, or
30 percent return in less than the same number of days is
the best course.
else factors into the mix?
Diversification is important.
You canít put all your eggs in one basketÖ..
or one stock, or one sector.
Using stop orders is important.
Limit your losses so you have capital to continue the
Play the downside.
You need to have an account approved for selling short
or hedging a position with put options. If not you are only
playing half the market.
Donít get discouraged with losses.
Losses are part of the game.
Many investors all too often lose money on 1 or 2 picks
and become gun-shy.
Then they miss 5 or 6 winners in a row.
Investing profitability is about consistencyÖ just like
Read and study the markets.
Not so you can spend 10 hours a day researching stocks
to buy, but that you can be more knowledgeable about the positions
you take and all the many factors that affect those positions.
Decide to continue to play the game.
Some investors burn out on the market and walk away just
as the market turns up after a decline.
Learn as much as you can about the markets and about
In regards to the market, where do you excel and in what
areas do you need remedial training?
Like the marathon runner, manage your resources, train
well, and determine to finish the raceÖÖin style.