ComputerHunter.org |
|
|
|||
|
 |
Investing: Do You Want To Make Money, Or Would You Rather Fool Around?
It always amazes me how much stock market investors resemble horse track bettors. Some are very conservative, willing to trade low returns for relative safety. Others bet with both hands, looking for the big score. In this article, I'd like to introduce you to a few characters I've met at racetracks. Then we'll see what they can teach us about investing. CONNIE CONSENSUS - Connie is easy to spot. She's the lady with the table buried in paper. Connie thinks picking horses is too complicated for her to learn, all those numbers and such. So she relies on the experts - all of them. Before she sits down, Connie buys all the tout sheets. She adds these to the predictions from the daily newspaper, the handicapper at the track and the Daily Racing Form. If they all agree on one horse, Connie heads for the windows. As you might expect, Connie wins more often than she loses. Too bad the horses she wins with carry the shortest odds (smallest payoff) at the track. It takes Connie a lot of winners to make up for her occasional losers. Connie takes the same approach to investing. Before she buys or sells anything, she checks the money shows on cable TV, as many financial papers, newsletters and magazines as she can get her hands on, and then asks her broker. By the time Connie is ready to make a move, she's acting on old news. She may pick good stocks, but she's so late she misses most of the gains and takes most of the losses. ARTIE ACTION - For Artie, being in the game is more important than winning or losing. Artie just has to bet every race. Ask him how he did, and he'll recite his list of winners for you. Many days, Artie will tell you he won $200. Add up the tickets on his table and you'll find it may have cost him $350 to do it. Artie doesn't care that he lost $150, as long as he has new winners to talk about. Artie plays the market the same way. He's in and out, up and down. He wins some and loses others. Talk to him and you'll think he's a genius. Ask him about losers and he can't remember any. In fact Artie thinks he's so good, he's thinking of becoming a day trader. He generates so many short-term capital gains and losses, he has a love/hate relationship with his accountant. ED EXOTIC - Ed loves the exotic wagers. Daily Doubles, Exactas, Trifectas, Pick 6 all get his blood moving.They all promise huge payoffs for small wagers. Ed's not dumb; he knows the odds of winning any one wager are pretty slim. He makes up for it by betting a lot of combinations. You can pick Ed out of the crowd after any race. He's the one busily shuffling through a deck of betting tickets to see if he won. When Ed decides to invest, he takes the same approach. He buys a bunch of penny stocks, a few junk bonds, maybe even takes a flier on an IPO or two. He has a stack of buy and sell confirmations on his desk. It takes Ed an hour to answer one simple question - "How ya doin', Ed?". "CYA" CHARLIE - Charlie never loses - much. And when he does, it bothers him to death. You see, Charlie is much more interested in _not losing_ than he is in winning. In a two horse race, Charlie will bet on both horses. Win and Place. When it comes to investing, Charlie is a real belt-and- suspenders kind of guy. FDIC-insured savings account? Yup, even though it only pays 2%. U.S. Savings Bonds? Charlie has those, too. Bought them for a walk on the wild side. What Charlie hasn't realized yet is that, in his quest for total safety, he takes a big risk of being left behind. Now that you've met our cast of characters, do you see yourself in one or more of them? Are you like Connie, who likes the idea of winning, but doesn't trust herself to make her own decisions? Your task is to learn enough to at least choose an advisor you can trust. Lacking even that, go out and buy a good no-load index fund. That way, you can take advantage of the collective knowledge of the whole market. Are you like Artie, who likes being able to talk about his latest "hot deal" more than making maoney on "boring" investments? Your task is to put most of your money into vehicles that will earn you the returns you need in relative safety. Go ahead, take 10%, and go have fun. Are you like Ed, who has so many irons in the fire he doesn't know if he's ahead or behind? Your task is to simplify your investments, concentrating on the ones you understand and have real confidence in. Are you like Charlie, so afraid of losing money that you lose out on higher returns? Your task is to understand that you are trading capital risk (risk of losing money) for inflation risk (risk of losing buying power). Find a mix of investments that will generate higher returns and still let you sleep at night. Whether you choose to take up these tasks is totally up to you. You are in charge of your financial life. Ask yourself one question, and act accordingly. Do you want to make money, or would you rather fool around? John McCabe's Web Guides show you how to find more and better success in all facets of your life. For more articles on living an abundant, vibrant, joyous life, come to http://Web-Guides.com
Google News - Top Stories
|
|
|
|
RELATED ARTICLES
Trading Expert Discovers Ways To Beat Stock Market Odds With Money Management The first point to mastering money management is that you have to understand when you're trading on the stock market is that you are playing the odds ? but unlike many forms of gambling, you can make money. The key to making this money is to respect the risk that is part of the market, and manage it. Money management is a set of rules and guidelines that enables you to turn a profit. By being triumphant with your money management skills, you can keep your risk at a level at which you're comfortable with, keep from making poor trading decisions, and ensure you don't loose your trading capital. This is why it is so important to follow money management rules. Options Education: Financing the Calendar! As a trader, one of the key things that I try to consciously do is to cultivate my instincts by talking with other traders and investors as often as possible. It still amazes me how large the divergence of opinion that exists regarding what people believe will unfold as we enter the new millennium. Many very respected names are literally predicting an economic earthquake that will measure a 10 on the Richter scale while others having looked at the exact same research claim that the consequences will be very mild. As a trader I have to evaluate the data and develop a strategy that I feel not only gives me an edge but allows for a great deal of error while still being low risk! Finding the Perfect Company The perfect company - it's the holy grail of the investment world. The company that will make its initial investment hundreds of times over. It's what everyone shoots for. To have bought Microsoft when it first went public... It's how fortunes are made. What does make "the perfect company"? What is an Investor Ready Business Plan A Business Plan, as all good entrepreneurs starting out in life should know is the foundation, or rather a springboard, towards the establishment and growth of a new business. A business plan is an essential tool for companies raising capital ? and your business plan needs to be Investor Ready. Getting Started In Investing Are you ready to open your pathway to financial independence? Which IRA Is Best For You? An Ira is one of the greatest ways to save on taxes currently and accumulate money for the future. Super Rules, OK? Do you rule your superannuation or does it rule you? Why You Need To Buy and Sell Gold Coins (Part 1) The Value of Gold in a Era of Paper Assets, Stocks, Bonds and Mutual Funds... The Realities Of Market Timing Market timing systems are based on patterns of activity in the past. Every system that you are likely to hear about works well when it is applied to historical data. If it didn't work historically, you would never hear about it. But patterns change, and the future is always the great unknown. How to Analyze the Veracity of Investment Newsletters When trying to analyze whether a promotional ad for an investment newsletter or a market timing investment trading system is worthy of investigation, the following questions should be asked: Investing Psychology Today Requires All Traders to Awaken Their Speculator Minds Stock trading strategies are as rampant today, as they were during the Great Bull Market. Yet, can you truly master the stock market like so many investing books propose? 25 Ways to Find Companies to Buy When you start your program to purchase your "ideal" company, you quickly realize that your ultimate success will depend on two primary skill sets: 1) Your ability to FIND viable companies that are for sale, and 2) Your ability to effectively qualify the potential acquisition investment once found. Secret Stock Options Trading Strategies the Experts Don`t Want You to Know To understand stock options, we need to look at Webster’s Dictionary’s definition of the word strategy. Get Wealthy With the Rule of 72 When it comes time to retire how many people would like to have a nest egg that is 2 or 3 or even 4 times larger than what they have? With an answer so obvious allow me to explain how you can make it happen for yourself. 5 Ways To Protect Your Bond Portfolio From Rising Interest Rates The Federal Reserve recently raised its target federal funds rate for the first time since March 2000. This could be just the tip of the iceberg, though, as many experts believe rising inflation and a strengthening economy will spur continued rate hikes for the foreseeable future. The Myth of the Earnings Yield Abstract Annuity Investment - The Whole Truth Do you ever feel like you haven't been told the whole truth? Kind of like something is missing? Well, you are not alone. Easily Finding A Good Stock There is a tremendous amount of software, complicated high priced newsletters, radio and TV stock pickers and Internet web sites that will help you find a stock that is going to make you rich. Volatile Oil The Light Crude Continuous Contract fell from $67.70 a barrel on Monday to $62.75 on Thursday, and closed at $65.79 on Friday. Consequently, oil stocks followed the sharp move in oil prices last week. Why Should I Use Penny Shares to Build Wealth? A strategic question. Why indeed?
|
|
|
|
|
