While it seems that every investing and trading web site or blog, thinks they have all or many of the answers necessary, for YOU to make money, nothing could be further from the truth. And that includes this site “The Prudent Trader” Why do I say that? Simply, because we are all different, we all have different time frames upon which we operate. We are at different stages of our lives and different stages of emotional development for the markets, our ﬁnancial conditions differ, as do our risk tolerances, we have different methods of operation,, and different trading psyche’s to mention just a few.
If you believe that to be true, then there is no one method or system, pundit or guru recommendation, that is suitable for all. You as an individual must put together a plan suitable to you and you alone. Fail to make a plan and you plan to fail. You are not reading this because you’re planning to fail. A trading plan should be unique to you and no one else. My trading plan or the plan of some well-known investor/trader is in all probability not suitable for you.
There is an old saying in business: “Fail to plan and you plan to fail.” That may sound like just a slick saying however, if you are serious about being successful, you should follow those eight words as if they were written in stone. Ask any successful trader and they will tell you, “You have two choices: you can either methodically follow a written plan, or fail.” If you have a written trading or investment plan, congratulations! You are in the minority.
It should be understood that having a plan is not a guarantee of success. What a plan does is eliminate one of the major roadblocks. Even if you have a plan, if it utilizes ﬂawed techniques or lacks preparation, your success will not come immediately, however you will be able to modify your course by documenting, learning what works and perhaps most importantly avoid repeating costly mistakes.
While no one has all the answers, and volumes could be written on the subject, I hope this dissertation will guide you and I also hope you will begin thinking for yourself. Initially, most novice investors, perhaps unknowingly, adopt a “seat of the pants” approach. They act in a variety of ways; a hot tip; a magazine or newspaper article; a recommendation from a friend; or perhaps TV commentaries or analyst recommendations. Often they are most anxious to buy after stocks have already risen substantially and the economic outlook is the rosiest. However, quite often this is the time to be selling your stocks and not buying them.
Why have a management plan? A plan is simply a road map that will take you where you are looking to go. If you do not know where you are going, ask yourself, “How are you possibly going to get there?” Every business has a plan. Every professional has a plan. An investor or trader needs a plan too.
Imagine for a moment building your house without a plan —- I am sure people would come from miles away, just to see!I I am not be talking about stock selection or market timing. While these are certainly subjects of importance, in this author’s humble opinion, they come into play only after you have your management plan set up, not before.
Talking Points and Playing the Buyback Trend With ETFs:
The Next Bear Market: How To Protect Your Assets (Short Takes)
It’s Not The Stock Market That Young People Don’t Trust, It’s The Advisers (Buzzfeed)
The Biggest Razor With Which To Shave Off Peaks (Alhambra)
Have we seen this golden movie before? (Humble Student)
It’s Official: The Boomerang Kids Won’t Leave (NY Times)
Another Nail in the Market-Timing Coffin (Servo)
The House of Mondavi: How an American Wine Empire Was Born (LongReads)
The Only Thing to Fear is the Unknown Itself (Investing Caffeine)
SEC Files Lawsuit to Enforce Subpoenas Issued to Congress (WSJ)
Retirement Planning: Think Outside the Pie Chart (Morningstar)
A Rare Peek Inside Amazon’s Massive Wish-Fulfilling Machine (Wired)
The Surging Stock Market: Too Late to Buy? (WSJ)
Why are some countries good at soccer? (Priceonomics)
The Coming Climate Crash (NYT)
Bubble, Bubble, Toil and Trouble: The Costs and Benefits of Market Timing (Musings on Markets)
Artificial Intelligence Raises New Hope for Cancer Patients (Re/Code)
Playing the Buyback Trend With ETFs
Have a Great Day!