Well planned investment strategies is key to proper investment decision-making which is dependent on the period and the type of investment option one opts for. Every investment type has its own strategies and terms of rules to be followed. Understanding the basic concept and analysis on the investment plans available followed by implementation of the investment strategies make great proceeds on drawing returns.
The investment planning stage is too often ignored by the young and the new. Markets have been and always will be volatile while tracking higher and lower, predictably and unpredictably at the same time. If you can't embrace the market cycle and use it to your advantage, you will have trouble becoming a successful investor. Is there is something you’re doing that doesn’t seem like it’s worth the time? Then you can either stop doing it or find ways to put more meaningful value into it.
Planning involves two basic determinations. Can I afford to take the risks associated with investing in the stock market?
Another "planning" necessity is defining and identifying a risk. The first step in risk minimization is education. You just can't afford to put money into things you don't understand, or which the investment advisers can't explain to you in plain and simple English.
The only reason to buy a stock is to sell it for a reasonable profit. In trading, a lower market price is an opportunity for buying. Portfolio should rise during falling markets because more stock prices are entering an acceptable "lower-price" buying zone. The objective of the exercise is to have cash available for buying during every downturn. Buying rules should be somewhat complex so you don't just go out and buy everything.
Selling rules should be simple. Ten percent is a reasonable profit level; even less is fine if buying opportunities are plentiful. No investor trader, speculator, whatever should ever allow a reasonable profit to go unrealized. Your goal is to never leave a profit of 10% (net/net) on the table,
What are the biggest mistakes that people make? They don't have a clear cut plan or a clear idea of what to expect from investment. They get stuck in the fear and greed emotional cycle, always buying high and selling low. They ignore the income generating portion of their portfolio. If you wish to achieve a great and ambitious vision, you have to be willing to fill in all the little details. Though they may seem terribly tedious at times, those details are what give substance
This is where your Market Cycle Investment Management Methodology comes from. Professional investment managers always compared their performance with cycles. It's clearly the best approach, if you study the charts. And there's no reason to expect this to change. So when the market gets to a certain point, you just sell everything and wait for it to go back down and then, at the bottom, you buy everything and wait for it to go back up.
Even if a stock makes it to your buy level, don't place an order unless the price has moved even lower by a specific amount. Do not make three or four purchase orders for the same security on the same day. Additionally, if you buy a stock today, don't look to buy it again the next day. The object of the exercise is to control your enthusiasm. Buy slowly and take profits as quickly as you can.
Without these natural changes, there would be no hope of gain, no chance of buying low and selling higher. No risk, no profits, and no excitement--- boring! Live up to your outstanding potential. Think and act and live like the successful person you know you truly are.
Asoka Samarakone,
Kalagedihena |
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