Dealing With Quiet Periods by Decisive Trading

There are always quiet periods when trading - times when the market just isn't lining up with what it is your trading plan identifies as your trading edge. The problem is that this is the time when most people undo all of the hard work they have done during the 'good' period. In this trading Vlog Decisive Trading explain the importance of remaining patient, and also ways to reframe those quiet periods into a positive!

Alternative Ways To Invest In Stocks (That Don’t Require You To Be A Stock Market Expert)

There are lots of alternative ways to invest in the stock market. Some are certainly more complex than others and may require a financial degree to get your head around, however others are relatively simple. Not only that – you don’t need much money to try out these investments. Here are just a few unique ways to make money out of stocks.

Use a robo-advisor

Many people hire a stockbroker to identify the best places to invest, however stockbrokers won’t always guarantee you the best deal – many will choose stock based on the commission that they get from the exchange. Fortunately, there are now robo-advisors that can offer unbiased advice on investing based on hard facts and figures. These are essentially pieces of software that monitor all the stock prices out there to find you the best deal for your needs. It takes all the confusion out of shopping for stocks whilst not having to rely on a commission-hungry broker. That said, most of these programmes aren’t free and charge a small fee for using them. Others are free, but require a minimum account balance. Comparison guides can help you to find the best robo-advisor for you.

Try micro-investing apps

Micro-investing apps are great for anyone regardless of your budget. They save up your spare change in a savings account and then use this to make small investments in available stocks. These apps recommend the best places to invest and you get to choose whether or not to invest in them. They’re essentially robo-advisors on your phone that also encourage you to save up money to invest with.

Try spread betting

Spread betting isn’t so much a form of investment but rather a form of gambling based on how much you predict a stock will rise or fall. Spread betting in the UK is becoming more popular and there are software programmes out there that can help you get into the swing of it. Such programmes can weigh up the risk of whether a stock is likely to rise or fall. You can do spread betting with commodities like gold and oil and foreign currencies.

Join an investment club

Investment clubs allow you to put money in each week into a pot. This money is invested with and the profits are then shared out amongst everyone. By teaming together, investment clubs are able to take advantage of stocks with high minimum investments that might otherwise be too expensive to invest in alone. This is only one form of crowdfunding and there are all kinds of other groups such as mutual funds groups and real estate investment clubs for investing in property. Some investment clubs may be aimed primarily at the rich and may require high weekly contributions, however others may only require a small contribution each week.

Collaborative Post

Source: https://blog.themoneyshed.co.uk/alternative-ways-to-invest-in-stocks-that-dont-require-you-to-be-a-stock-market-expert/

Is this the Beginning of the Big Stock Market Crash?

Written by Andy Tanner | Friday, February 23, 2018

Read time: 5 min

Where we are, where we might be going, and how I plan on profiting no matter what direction the stock market decides to go

I’ve had some requests to explain a little bit about the recent roller coaster activity in the market. There have been a lot of big drops and then big rises.

I’ve spoken a lot about how I am skeptical of the high price of this market. I still am. People are asking me, “Andy, is this the big drop you’ve been talking about?” To answer this question that seems to be on everyone’s mind, I want to explain what I think is happening right now in a way that anyone should be able to understand.

Looking at current charts of the market, I do see some spikes in in volatility. This shows me that the market’s unpredictability is increasing. But do I think that this is a big one? No, probably not. However, I think there are some things that we should start watching more closely.

When I say that the market seems to be too expensive or overvalued, here’s what I mean: How much does it cost us in price to earn a dollar of profit? It’s another way of looking at the idea of earning a return on our investment.

In the stock market, there are many big investing companies (“institutions”) that buy and sell huge blocks of stock. These institutions are probably the biggest force in the market to affect prices. When the market is going up rapidly like it has been over the past year, these institutions want to ride it as long as possible. But at the first sign of trouble, the institutions will start selling immediately. These days, this is usually the cause of our big market drops.

What can this mean for the average investor like you and me? Well, I think it’s very important to know as much as possible about any type of investment you want to get involved with. So let’s spend a few minutes to understand how a company or a market gets valued.

Suppose you had a money machine. When you turn the crank on your money machine, it spits out a dollar for you. These dollars you create are your earnings.

In the world of business, there are all kinds of money machines. If the company is Apple, the action that turns the crank is the devices they sell. If the company is Pfizer, they turn the crank through the sale of pharmaceuticals. The more the crank gets turned, the more money they earn.

For investors like us, our two main questions are:

• How much does it cost to buy a particular money machine?
• How much earnings does that money machine generate?

When we know the answers to these two questions, we can do a little math to come up with the Price to Earnings Ratio (PE Ratio).

If you are familiar with real estate investing, this is very similar to the Cap Rate (except the values are flipped). Overall, it’s a way for us to quickly understand if a particular investment is a good value, or if it’s too expensive.

In the world of stocks, many investors keep and eye on the Shiller PE index, a price earnings ratio based on average inflation-adjusted earnings from the previous 10 years,. The median Shiller PE Ratio has historically been around 16 - 17. It’s a good barometer of what value we should be targeting. Again, a PE of 16 means that it costs us about $16 for every $1 of earnings we receive from that stock.

Looking back in time, we can see that there have only been a few times that the PE Ratio for the S&P 500 has been above this level. Before the crash of 1929, prices almost doubled and people were paying up to $30 for every dollar of earnings from the S&p 500. And during the dot-com boom people were paying HUNDREDS of dollars for companies that had zero earnings.

When the price of stocks gets really high, we’re forced to answer these questions: Are these high-priced companies cranking out enough dollar bills to still be valuable investments to buy? Are the profits worth the expensive price tag? The moment investors see that the PE ratios are too high, they will only continue to buy if they see growth. And if the outlook for growth becomes pessimistic, selling can insue.

Of course, this doesn’t mean that the market is going to crash immediately. But as we look back historically, there have only been a couple of times in the past I mentioned before when investors have been willing to pay this much for stocks. As the dot-com bubble showed, when investors were paying $44 for $1 of earnings, they eventually said it wasn’t worth it anymore. That’s when the big crash occurred.

The Risk Of Having A 401(k) Account

Most people with retirement accounts such as a 401(k) have not been worried over the past few years. They hope the value of their accounts go up and up. For those who have these types of accounts, there are two things to keep in mind:

1. The value of your account does NOT mean you have that much money waiting for you. Instead, it represents the current value of all the investments that are held in your account. When you want to get money out of the account, your account manager will sell shares at whatever the current market value on the date you sell.
2. When the market goes up, the value of your account will go up with it. But when the market drops or crashes, your account value drops with it. There is no protection for you.

Protecting With “Stock Insurance”

Insurance is a great tool to protect things that you value. We buy insurance for our homes, for our cars, and for our health. We don’t need insurance every single day, but we buy it to protect us when those rare bad events happen. It’s impossible to predict exactly when a bad event will happen, but it’s easy to prepare for it.

One of the great tools available for stock investors is to buy “insurance” on your stock positions. This is what we teach our students every week in my Mentor Club. We show how to protect yourself from any anticipated market problems, and also how to turn that into cash flow. In fact, many times we can structure positions so that we generate enough cash to actually pay for this insurance.

The tool we use to buy this insurance is called a stock option. When we are educated on how options work, and how to maximize them for different situations, we can control our risk and predict our cash flow very accurately.

The key is to know when to buy the insurance. It’s a lot cheaper to buy insurance when you don’t need it than when your house is going up in flames. The same is true with stock protection.

Even though we don’t know exactly when a big crash will happen, we can spot early signs based on what has happened in the past. This allows us to buy insurance via options at lower prices versus buying in the middle of a crash. We call this kind of insurance a “hedge.”

Our Students Learn To Do This With Zero Risk

One of the advantages of learning to trade stocks and options is you can do it risk-free with a practice account. Also known as paper accounts, these allow you to make trades using real market prices and information – but you can practice and improve your skill without risking any real money.

Virtually every online brokerage allows you to open and use these types of practice accounts. They’re virtually the same, so you can open one with any brokerage you choose.

We teach these strategies and techniques in our Mentor Club. This is our weekly training service where you get to follow along as we find profitable trades, set them up, make adjustments as needed, and show you exactly how much we make or lose on every trade.

Our students learn how to set themselves up to profit no matter if the market is going up or down. They also learn how to protect themselves from big market crashes that hurt the typical stock investor who sits on a buy and hold account.

Anyone can join The Mentor Club risk-free for 30 days. It’s a great way to see if this type of cash flow investing is right for you. You can get full details at AndysMentorClub.com.

Source: http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/February-2018/Is-this-the-Beginning-of-the-Big-Stock-Market-Cras.aspx

WHEN THE SKY SEEMS TO BE FALLING

Posted by: Team Tony

Legal Disclosure: Tony Robbins is a board member and Chief of Investor Psychology at Creative Planning, Inc., an SEC Registered Investment Advisor (RIA) with wealth managers serving all 50 states. Mr. Robbins receives compensation for serving in this capacity and based on increased business derived by Creative Planning from his services.

“Global financial markets slip as oil price plunges to new lows” – The GuardianThe recent headlines about global financial markets are enough to incite panic – or at least concern:

“U.S., world stock markets slide as panic in China spreads” – The Washington Post

Volatility the new watchword for financial markets” – South China Morning Post

“S&P 500 off to worst-ever start to year” – USA Today

China’s stocks fell 11.6% the first week of the New Year, renewed tensions in the Middle East are causing the price of oil to dive, and George Soros is reporting that the current challenge reminds him of the 2008 financial crisis; all in all, it’s easy to wonder what this is going to do to your portfolio.

However, financial security is not out of reach. In fact, with the right preparation and strategy you can thrive in any economic environment. In the articles below you will find:

•    The exact portfolio of the world’s largest hedge fund leader

•    An explanation of risk in both inflation and deflation

•    A simple and effective breakdown of how to allocate your assets

•    A look into the buy-and-hold strategy

Volatile markets do not have to determine your stress level, and with the right strategy they do not have to disrupt your future plans, either. Take the time to understand these tactics and take massive action. Your future self will thank you.

Source: https://www.tonyrobbins.com/wealth-lifestyle/sky-seems-falling/

How to Invest in the Stock Market for Beginners

If you've never invested before, and have no idea what the stock market is, check out this short video that takes you through the initial steps of investing!

What will you invest in? Stocks and shares? Or the new and exciting world of cryptocurrency?!

Market Numbers Through 2017 - Not Quite As Impressive As You Think

No one would deny that 2017 was a banner year for the markets... at yearend, all the equity indices were close to their all time highs. Even the WSMSI (Working Capital Model Select Income Index) had a capital growth number approaching 12%.

But, lets step around Wall Street's promotional pennants, and look at the numbers over the longterm, say this century so far...

You'll recall that the period from 1999 through 2009 was dubbed "The Dismal Decade" by a Wall Street that just couldn't cope with the idea that the "shock market" (collectively) could actually go backwards over such a long period of time.

Has the "bull market" that evolved from the dismal decade really produced the type of gains you've been hearing about?

· From 1999 through 2009, the NASDAQ (home of "FANG" type companies since forever) shrunk by a whopping 34%. From 1999 through 2017, it was the worst performing of all the indices, rising just 71%, or an average of less than 3% compounded, per year. So even the spectacular 160% market value gain since 2009 hasn't produced spectacular longterm performance.

· From 1999 through 2009, the S & P 500 (although less speculative than the NASDAQ overall) lost a scary 39% of its value. Recovering more quickly than the NASDAQ, the S & P has gained approximately 94% in market value over the past 18 years, or an average of less than 4% compounded, annually. So not so much to celebrate in the S & P either... for the longterm investor.

· From 1999 through 2017, the higher quality content DJIA suffered less than the other indices through the dismal decade, losing less than 1% per year, on average. But its 18 year, overall performance, of 115% market value growth was an average of less than 5% per year. Reflective of higher quality content, yes, but really not so impressive overall.

So what about an income purpose investing approach during the same two time periods?

· From 1999 through 2017, a $100,000 portfolio of income Closed End Funds (CEFs) paying roughly 7% per year, compounded annually, would have grown the invested capital to roughly $340,000 by the end of 2017... a 240% gain in Working Capital, and nearly three times the average longterm gain of the three equity averages!

· During the dismal decade itself, a $100,000 portfolio of income CEFs paying 7%, and compounded annually, would have grown the investment capital by roughly 111% (10% annually).

· Note that the average annual gain of roughly 13% is based on annual rather than monthly reinvestment of earnings... so it would actually be even higher. Hmmm, kinda makes you wonder, doesn't it?

Now some what ifs:

· What if you were living on the income or growth of your portfolio at any time before mid-2010?

· What if you were living on 4% of your portfolio "growth" or "total return" prior to the end of 1999, how much did you have left when the rally began in 2010?

· What if we don't get enough more years of double digit market growth for the equity markets to catch up with the income illustration above?

· What if the market doesn't produce "total return" greater than your expenditure needs forever?

· What if your portfolio contained enough income purpose securities to provide for your expenditures, combined with equity securities of a quality superior to those contained in the Dow?

· What if the stock market corrects again this year?

Buy the book

"The Brainwashing of the American Investor: The Book That Wall Street does not Want YOU to Read" outlines strategies and disciplines that could get you to a safer and more productive retirement income portfolio.

Article Source: https://EzineArticles.com/expert/Steve_Selengut/12786

Article Source: http://EzineArticles.com/9861802

How to Retire Early: The Shockingly Simple Math

How can you manage your money so you can retire early? Can anyone do this?

Watch now to find out!

3 Threats to Amazon You Must Own Today

I love it when a plan comes together.

In early November, I wrote about Brazil's airplane maker, Embraer (NYSE: ERJ), and its promising lineup of defense and civilian aircraft manufacturing contracts.

Separately, in December, I said: "If you're looking for the best place to invest in 2018, one of your best bets is to put on your investment banker's hat and bet on 'M&As' - mergers and acquisitions."

Both predictions converged just before Christmas. Embraer's shareholders reaped an instant 30% windfall when Boeing announced it was in talks for a "potential combination" with the company.

It's not a done deal, of course.

As Embraer's largest shareholder, Brazil's government may only want to sell a big piece, not the entire company. Or perhaps it demands onerous financial terms.

But the point is, in a wide swath of industries - not just aerospace, but pharmaceuticals, chip manufacturing, packaging, chemicals, consumer goods, media, telecommunications and more - the game of M&A "musical chairs" is already underway.

And no one wants to be left without a seat when the music stops.

Amazon Competitors to Invest In

Another sector where I expect to see a lot of M&A activity this year? The U.S. retail sector.

A major theme I expect to emerge this year are Amazon competitors pairing off with the goal of better competing against Amazon.com Inc. (Nasdaq: AMZN).

For instance, eBay Inc. (Nasdaq: EBAY) is a likely buyout candidate.

Potential buyers? Google, among many possible suitors. It desperately needs an internet retail arm of its own if it wants to go head to head as one of the Amazon competitors.

eBay, as one of the most venerable internet retail brand names, and with an existing network of fulfillment warehouses, would be a good place to start.

The Kroger Co. (NYSE: KR) is another buyout possibility for Amazon competitors. Its stock is down 35% from last year's highs owing to worries about whether it can compete with Amazon - an overblown fear as far as I'm concerned.

The grocer has nearly 3,000 stores around the U.S. Its success in selling organic foods is a major reason Whole Foods leaped into the arms of Amazon to begin with.

Kroger is no laggard in "retail tech" either - a few days ago, the chain said it will roll out "cashierless" checkout technology in its stores this year.

W.W. Grainger Inc. (NYSE: GWW) is yet another candidate for a merger deal, in my opinion.

Grainger isn't usually thought of as a retailer. It's considered an "industrial supply" business, selling everything under the sun - cleaning products, paper clips, shelving systems, you name it - to other businesses.

Like Kroger, the stock was knocked down last year as investors fled in fear of Amazon. But Grainger's network of warehouses and distribution centers are ready-made assets for any company hoping to "bulk up" and compete effectively against Amazon.

Best of all, these three companies aren't fixer-uppers. They're already successful, profitable companies.

Together, they'll report $15 a share in profits in 2018. Two of the three pay dividends of around 2% as well.

A veteran investor and longtime financial journalist, Jeff L. Yastine is a contributor to Sovereign Investor Daily and Winning Investor Daily. He also serves as editorial director, focusing on creation and development of new products and editorial resources that will help Banyan Hill members "be sovereign." Read more here.

Article Source: https://EzineArticles.com/expert/Jeff_L._Yastine/2192663

Article Source: http://EzineArticles.com/9859438

How The Stock Exchange Works (For Dummies)

Have you ever wondered how the stock exchange works? Or maybe you were just curious as to what the stock market actually is? What is a FTSE anyway?

Over 4 million people have watched this video to find out!

Reasons the Next Financial Crisis Will Be Worse & How You Can Save Yourself

MARKETS ARE FAR MORE VOLATILE NOW IN THE WAKE OF BREXIT AND TRUMP'S ELECTION:

What will happen to you when your savings and retirement account are completely worthless? Gold is the only asset that cannot be created. It has to be mined and pulled out of the earth through a natural process. Against all odds, the U.S. has elected Donald Trump as its new president and no one can predict how the next four years will go. As a commander in chief, Trump now has the power to declare a nuclear war and nobody can legally stop him. Britain has left the EU and other European countries are planning to follow their example. No matter where you are located in the western world, uncertainty is in the air like never before.

THE U.S GOVERNMENT HAS ITS EYE ON RETIREMENT ACCOUNTS:

In 2010 Portugal seized retirement account assets to help plug holes with government deficits and debt. Ireland and France did the same in 2011, as did Poland in 2013. The U.S. government has been watching. Since 2011, Treasury has taken money from government workers' pension funds on four separate occasions to cover deficits in federal spending. Investing billionaire legend Jim Rogers believes that private accounts will be the next ones the government raids.

TOP 5 U.S BANKS NOW LARGER THAN BEFORE THE CRISIS:

You learned about the five largest banks in the U.S. and their systemic importance as the unfolding financial crisis threatened to collapse them. Legislators and regulators promised they would address this issue once the crisis was contained. Over five years after the crisis ended, the five biggest banks are even bigger and more critical to the system than before the crisis began. The government made the problem worse when it forced some of these so called "too big to fail" banks to absorb the failing ones. Any of these banking behemoths failing now would be absolutely catastrophic.

DANGER FROM DERIVATIVES THREATENS THE BANKS MORE NOW THAN 2007/2008:

The derivatives that crashed the banks back in 2008 did not disappear as regulators promised. Today the derivatives exposure of the five biggest American banks is a whopping 45% greater than before the economic collapse of 2008. The derivative bubble is over $273 trillion now versus the $187 trillion of 2008.

U.S INTEREST ARE ALREADY AT ABNORMAL LOWS SO THE FED HAS LITTLE ROOM TO CUT RATES:

Even after raising interest rates once last year, the Federal funds rate is still in the range of ¼ to ½ percent. Consider that before the crisis erupted in August of 2007, the Federal funds interest rates sat at 5.25%! In the next crisis, the Fed will have less than half a percentage point total it can reduce rates to stimulate the economy.

AMERICAN BANKS ARE NOT THE SAFEST PLACE FOR YOUR MONEY

Global Finance magazine puts out a yearly list of the top 50 safest global banks. Only 5 of those are U.S. based. The top spot an American bank commands is only #39.

THE FED BALANCE SHEET IS STILL EXPANDED FROM THE FINANCIAL CRISIS OF 2008:

The Fed still has nearly $1.8 trillion in mortgage backed securities on its balance sheet from the 2008 financial crisis. This is more than double the less than $1 trillion it held before the crisis began. When mortgage backed securities go bad again, the Federal Reserve has a lot less maneuverability to absorb bad assets than before.

THE FDIC ADMITS IT LACKS RESERVES TO COVER ANOTHER BANKING CRISIS:

The latest FDIC's annual report shows that they will not have sufficient reserves to adequately insure the nation's banking deposits for minimally another five years. This stunning revelation admits that they can only cover 1.01% of U.S. bank held deposits, or $1 out of every $100 of your bank account deposits.

LONG TERM UNEMPLOYMENT IS STILL HIGHER THAN BEFORE THE GREAT RECESSION:

Unemployment was 4.4% in early 2007 before the last crisis began. While the unemployment rate has finally reached the 4.7% levels seen as the financial crisis began to ravage the U.S. economy, the long term unemployment remains high and the employment participation rate significantly lower more than five years after the previous crisis ended. Joblessness could be much higher in the wake of the coming crisis.

AMERICAN BUSINESSES FAILING AT A RECORD PACE:

In the beginning of 2016, the Gallup CEO Jim Clifton announced that American business failures are now greater than new business startups for the first time in over three decades. The dearth of medium and small businesses has huge implications for an economy long driven by free enterprise. Bigger businesses are not immune to the problems either. Even American economic heavy weights like Microsoft (reducing 18,000 jobs) and McDonald's (shutting down 700 stores for the year) are suffering from this dismal trend.

http://productreviewhouse.com/buy-gold-bars-gold-investment-advice

Why Smart Investors are Adding Physical Gold to Their Retirement Accounts

1. Hedge against inflation AND deflation.

2. Safe haven in times of geopolitical, economical and financial turmoil.

3. Hedge against the declining dollar and money printing policies.

4. Store of value.

5. Limited supply. Increasing demand.

6. Portfolio Diversification and Protection.

Article Source: https://EzineArticles.com/expert/Raji_Muheez/2470974

Article Source: http://EzineArticles.com/9807744

Important Basics To Check When Trading Online Securities

Online securities trading can be very rewarding when done in the right way. When interested in this kind of investment, you would need to select a good trading platform that makes the process easy for you. You are also better off getting a broker to help you with the trading depending on the kind of trader you want to be. There are so many brokers out there, most of which offer free account opening on their platforms so you can start the trading. Whether you are just a beginner in this kind of trading or you are an advanced trader, it is important to make sure that you choose the right platform and brokerage for your trading and below are the most important basics that should matter when making your decision.

Types of securities

It is only wise to begin by finding out what securities, you will be able to trade in on the platform. It is best that you choose one that gives you the chance to trade in all the securities you are interested in currently or maybe interested in the near future. Shares, IPOS, futures, and options are some of the securities you can choose to trade in.

Real time quotes

There are different ways that price quotes can be pulled but if what you get is data that is not really up to date, then you will be doing very little in terms of maximizing your returns. Most web based platforms offer real time data, but Is it important to make sure that is what you really get with your trades. You may need to refresh manually, but the platform should have the right measures in place to offer real time streaming.

Alerts and watch lists

As an active trader, you will find alerts very important to your trading. The watch lists and alerts can depend on different aspects that are likely to have an impact on the trading. You therefore should select a platform that makes it possible for you to customize such alerts via text or email so you can make any decisions related to the trading.

Order execution and timing

A good trading platform should at least make it possible for you to place orders that can be executed at any given time within the trading hours or which remain good unless you cancel them. On platforms that are more advanced, you may be in a position to place limit orders with more variability so you have more control over order timings and also executions.

Kinds of orders

Placing trade orders can differ from one platform to another but you basically can place, trailing stop orders, market on close orders stop loss orders among others. A wider selection of orders could prove to be better for those just starting to get familiar with the online trading. For advanced kind of traders, then a platform that makes it possible to place conditional orders for multiple trades they set up can be great. This way, automatic executions are made possible depending on the specific triggers selected.

Plus500 review offers great insights on why the platform is one of the best you can choose for your trading. Apart from the competitive rates and low spread, the platform offers access to trailing stop orders, buy and sell limit orders and stop loss orders too.

Article Source: https://EzineArticles.com/expert/Shalini_Madhav/2396631

Article Source: http://EzineArticles.com/9860305

Why The Rich Pay Lower Taxes

Have you ever wondered why the rich seem to pay less tax than those less financially well off?

Check out this great video by Hank Green explaining!

4 Things to Avoid When Investing in Stocks

In 2016 I churned over $1M dollars in trades on one of our retirement accounts. (a more detailed post on that is in the works) My return at the end of the year? About $2K. Wah Wah. We're you expecting a bigger number? So was I.

I don't use that strategy for all our accounts, but trying to "beat the market" I wanted to see how well I could do.

Over the years I've tried a lot of different strategies and have been affected by market psychology just like many people, but looking back after investing for 30 years, my biggest mistakes stand out. I've highlighted here, what I estimate to have cost me by biggest losses during that time. Let's get to it.

#1 Asking friends if a stock is a good or bad investment 

I had a friend who was a heavy user of Adobe products. A lifetime customer, who was intricately immersed in the features and had used their software for many years. When a recommendation to buy the stock popped up, I bounced the idea off of her, and she hedged and wouldn't commit that she thought that there was still growth available within the company. I took that as negative commentary and passed on the stock. The stock has steadily marched from about $40 to topping $170 recently. Asking a friend for a green light or red light on such an investment is the same as throwing darts at a stock chart. You can value their opinion as a customer, but don't read any more into than that.

Fix: Do you own research and trust your gut.

#2 Paying too much attention to news sources 

I often evaluate my investment sources, based on what they cost me, and my subsequent return on investment ideas that I garner from their content. Based on that formula, Barron's magazine has probably cost me in excess of $15K for the price of going too heavy on Transocean (RIG), based on a 500 word article written about the offshore drilling company in 2013. The parent company of the Deep Water Horizon rig tragedy that flooded the Gulf coast with oil for 30 days in 2009, looked good on paper. It wasn't and it proceeded to sink from $50 to below $10 over a period of 3 years. With so much noise on all the investment channels it's hard not to be influenced by the stock pick of the day.

I was a little surprised when the story broke that even Jim Cramer doesn't beat the market. Most of this is about making sure that you're balancing your true risk (see below) and researching as much about the company as possible.

Fix: Don't go too heavy on a single investment and use multiple sources to balance your decision.

#3 Watching the market too closely every day

In the past, I've tried to micromanage my investments, in buying and selling, based on overall profit or loss, in a day, week, or monthly period. Most of the time, that has resulted in what is the standard for most people that try it. I end up selling my winners too early, and holding on to my losers (and a larger percentage of the losers) for too long. If you make it to the end of this article, and you can truly come to a reconciliation of your true risk exposure, then at the end of the day, you should feel very comfortable holding your investments, no matter what happens in the market on a day to day basis. (and that doesn't always simply mean "Buy and hold" forever)

One stock that I micromanaged too closely was Fitbit (FIT). It started out like gangbusters and I felt like a genius early on, but there was so much negative sentiment about the stock, even though the company was showing a profit, that when the tide started to turn, I was over exposed. I learned my lessons on that one, but I still hold onto some shares at a risk level that I'm OK with. I do that, because I still believe in the company and I'm an avid user of their products. Based on my current investment, I'm OK if the stock moves down by 10% to 15%.

Fix: Turn the news channels off. There is very little in the way of "Breaking news" that will make a difference in your returns.

#4 Selling too soon

This last one is really the flip side of the same coin, related to the one above. I've lost so much money by selling too soon, that I should long be retired on a beach somewhere. It reminded me of a note that I had sent to my niece that addresses long term investing strategies. From Microsoft to Amazon, many people have stories that include selling too soon, and they shouldn't because it's easily unavoidable.

My most recent premature trigger pull was with Weight Watchers stock (WTW). I had entered a position 3 years ago, and added to the position as the stock fell. I garnered a windfall when Oprah purchased 10% of the company, and made a nice little profit on the bounce. While the stock came off it's highs of around $25 and returned to the low teens for a year, I had always felt the stock was worth in the neighborhood of where I originally established a position, $50. However, after the ups and downs of another year, with no traction, I decided to exit my position of my remaining 600 shares at $17. Today, the stock is at $46.

Everyone has Win/Loss stories, but the bottom line here is, that I went against my own (and my wife's) better judgement of selling too early. The stock is at $46 today, and I would have garnered an extra $18K if I had simply held the stock. Dollar cost averaging works when you sell too. So if you're exiting a position that you think might turn around, simply don't exit it 100%.

Fix: Buy what you know and understand the fundamentals. Also understand the competitive landscape.

Understanding risk

When looking at a basket of recommendations from various sources, in the past, I've sometimes tried to "cherry pick" a guess, based on a gut feel or on buzz that was in the market. Don't try this. It doesn't work. What I realized about what I was doing was that I was taking on way too much "risk". Everyone knows that investments are risky, but you really need to objectively take a look at how much exposure you have, especially across multiple investment accounts. For example if you own offshore drillers in one account, and Exxon in another account, you should consider that as an investment in oil. The more accounts that you maintain, the more difficult that can be.

What gave me a better handle on understanding risk was reading the chapter on the topic from a basic investment book. The book provides practical examples about risk, and reality. When you pick a stock and it gradually slides from $40 dollars a share to $20 dollars a share, then you've lost 50% of your original investment. HOWEVER, the thing that most people overlook is that that same stock must rise by 100% now, just for you to break even. The chances of that happening, especially over a short period of time are very small. Now, I take a much smaller initial position in any stock, and decide over time if I want to subsequently add, subtract or exit from that position.

This also let's you get a feel for management's reporting style, during quarterly earnings reports. Some of these CEO's are maddeningly frustrating with what they say, and how they report their own numbers. Getting a feel for those skills might provide you with an indication of whether you're a good fit for that company, as an investor.

Bottom Line

The bottom line is that you should really focus on learning as much as you can about yourself, as an investor. That includes both strengths and weaknesses. Do all the leg work that you can, and take into account what you know to be historically accurate. History repeats itself, and that is more true in the stock market than almost any other place.

For more content about personal finance visit my blog at https://www.MyCareerReboot.com

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