| |
| |
|
|
Day Trade Blog - Ivesting Information Learn to invest in the stock market, invest like a pro daytrader swing trading penny stocks |
|
|
|
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
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Reasons For Joining An Investment Club Whether you're a novice investor or an experienced stock picker an investment club may be beneficial to growing your investment portfolio. This article explains what an investment club is, why you should have an investment program and finally why you should join an investment club. Investors: Avoid These 5 Common Tax Mistakes For many investors, and even some tax professionals, sorting through the complex IRS rules on investment taxes can be a nightmare. Pitfalls abound, and the penalties for even simple mistakes can be severe. Creating a Financial Future - Putting Your Plan Into Action Part 1 This column has previously discussed "picturing the future that we desire", and outlining a plan to achieve it. We mentioned that the plan must include goal-setting, measurement, and implementation. Hedge Fund 101 - Make Money with Hedge Funds Investors are always looking for the best investments that will yield the most profit. Any investor who can afford the extra cost should consider investing in Hedge Funds. Investing Offshore for Retirement As an expatriate you are in a privileged savings and investing position. Make the most of the options available to you while you can, consider investing offshore for your retirement. Investing and the Fear of Regret and Greed People tend to feel sorrow and grief after having made an error in judgement.Investors deciding whether to sell or buy a security are typically emotionally affected by whether the security was bought or sold for more or less than the current price. Playing With Money - And Making More Ready to start playing with your money? Not interested in complicated businesses or boring bank C.D. Help with My Annuity The cries are heard from the distance, "I need help with my annuities." Nothing has changed. The Perfect Economy? The U.S. Holy Grail Investments Every year I go to the Money Show inOrlando, Florida. Thousands attend. My Way Or The Highway: Give Your Financial Professionals A Good Talking To! All this talk about Investing is encouraging lately. Over the last few years, more people have become interested in the duty to invest there money, then ever before. Will a Falling Dollar Derail Your Plans for Retirement? How much are you willing to pay for a tank of gas? We've all watched as gas prices hit record highs, but what would you do if you filled your tank and paid by credit card only to discover on your monthly statement that you paid $80 to fill an economy car. No, this is not some future doomsday projection of oil prices. Investing and Asset Allocation Sometimes you spend sleepless nights worrying about which stocks to buy and which to sell, which funds to own and which to dump and whether to get into bonds.All of these are legitimate concerns, but the greatest determinant of your success as an investor will not be your sagacity in selecting specific stocks, bonds or funds for your portfolio. Investing in Car Dealerships: How to Do It Right The financial characteristics of the automobile dealership are attractive:". . Creating a Financial Future--Putting Your Plan Into Action Part 2 Real Estate can be a useful tool for investing. The simplest real estate investment is not truly an investment, but a cost-reduction - that is owning your own home. An Investment Real Estate Strategy Unknown To Most Is A Negative Amortization Loan If you want to make the most of your personal or investment real estate, you should consider a negative amortization loan. Mortgage amortization is basically mortgage balance reduction. When It Comes To Investing, Asking The Right Questions Can Help You Make The Right Decisions Are you ready to open your pathway to financial independence?Well you should be. The sooner the better. How to Use Annual Report There are many steps in calculating the fair value of a company. However, before we even do that, it is imperative to know how a company earns its profit. 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.For individuals three types of IRA's will normally come under consideration. Profitability And Stock Turn Rate The inventory of the typical store represents the largest single element of its total assets. The sale of goods from this inventory is the merchant's chief source of operating profit.
|
| home Day Trade Blog | site map |
| © 2006 Day Trade blog investing and stock market resource |
