Quote:
Originally Posted by GregWeld
Number ONE!!
Good for you for learning. Knowing what and why you own something is CRITICAL to being a decent INVESTOR.... and that's why I preach to know and understand what you own. It really really helps when the market SUCKS.... Nobody cares what they own when the market is hot -- but it's invaluable when you're dying the death of a 1000 cuts!
Number TWO...
Scaling in and out is not a good thing in the way you're "thinking". You'll be out when it goes up and you'll be in when it sucks and so on...
Scaling in and out is more about MENTALLY doing a checks and balances --- i.e., If you plan to invest 5,000 dollars --- or you intend to buy 1000 shares of something. It FEELS better to buy HALF.... and wait... watch - learn - is the stock doing what you thought or did you jump before you really did your homework etc. So give it a FULL quarter.... then buy another quarter.... OR maybe you made a mistake on the intial buy -- and lucky you! You only put in half!
It's a thing so you don't end up with buyers remorse. Same way selling. You can get sellers remorse... 'cause just after you sold half -- the SOB shoots up $3 a share on a better profit report (or something - whatever).
NOW ---- If you have no NEW MONEY -- then you just need to SAVE that new money.... so that your new money is actually new money - not the same money you already had invested. Selling to buy something else is EMPLOYEE RETRAINING - but you still have the same amount of employees! You need NEW employees.
This - of course... is in ADDITION to repositioning because you have a big loser --- or because a stock you owned doubled or something -- and you're just retraining. But you don't want to sell one stock just because it's going up to buy something else you think MIGHT go up. Do that with new money.
AND --- if you're a real investor -- stay 100% invested with all your long term funds. When the stocks go DOWN -- your dividends will be buying you more shares at lower prices -- but if you don't own the stocks - you won't get the dividends! Your dividends being reinvested for you each quarter is also an automatic scale in.
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Thanks GW, it always takes me 3-5 times of reading what you say until I 'get it'
but that makes total sense.
Trading is fun until
Gotta keep learning how to be an investor.
