1. Lacking an investment plan a / k / a / "Do not be a trip without packing the map". A pre-planned asset allocation generates positive results and eliminates emotional panic selling.
2. Buying cheap stocks a / k / a "Road crews erect" Dead End "sign for a reason." Most stocks with low market prices also come at the bottom for a reason. There should influence be important institutional price and many will not even look at the stocks under $ 8 or $ 10.
3. Purchase story stocks a / k / a "A good fable lulls to sleep a child." Do not be taken by stocks compelling "story". The plots have a cure for cancer, a major oil strike or a revolutionary invention. Such promising stories rarely prove true. If the "story" materializes, the company will continue to buy.
4. Selling your winners a / k / a "You have to know when you need 'em" hold. "Do not sell your winners. These companies combine excellent management, product and cash flow, creating a steady growth for the coming years . Keeping these companies for the long term will compensate for other investing activities errors. Actually can create. one or two big winners real wealth
5. Company on a stock highlight a / k / a reached "Trees do not reach to the sky, and companies not to pursue growth beyond reason". Top companies peak for reasons such as attrition of senior management or competition. Systematic pruning will help you avoid a rotting, unhealthy investment.
6. Under diversification a / k / a "Ideas are good, but a mind full of them is better." Resist the urge to rely on a few stocks that you know. Lack of portfolio diversification leads to erratic and volatile returns, and owning several companies in the same industry also is not diversification. The best investment results achieved by investing in leading companies in various sectors.
7. Diversification than a / k / a "A benefit an investor's portfolio stretched like an old T-shirt will not help their understanding." You do not make diversification by spreading yourself too thin. Although a mind full of ideas is good ideas acted on a whim waste good thoughts.
8. Than trading a / k / a "replanting a garden every week will not produce high quality tomatoes." Do not follow the market "noise" and bounce from sector to sector or theme to theme. This prevents investors reap the benefits of a long-term winner. stocks Give sufficient time to mature and compound.
9. Too much margin a / k / a "Living on borrowed time brings a wave of excitement, but it's a quick trip as time passes." Can not underestimate the damage. Margin The relatively low cost and ease of obtaining leverage investors take down a dangerous road. When a portfolio on margin decreases rapidly, it can overwhelm even experienced investors.
10. Too many options a / k / a "In life there is always potential, (but the timing makes the difference"). When you buy options, you are right to use and impeccable timing. Options allow an investor to influence to use and control more shares, but there are relatively high spreads involved in the trade in them. Many times investors lose money on their transaction, even after they followed proper assumptions.
Mr. Kimmel is a private money manager and author of "Magnet Investing, building a portfolio and pick winning stocks using your home computer." His method was the subject of a Forbes Magazine article (June, 2004)....
No comments:
Post a Comment