Actionable news
All posts from Actionable news
Actionable news in IBB: iShares NASDAQ Biotechnology Index Fund,

3 Myths (Out of Hundreds) in Investing

1. You can't time the market....

We know some financial professionals do not understand or have studied Technical analysis and even some who have cannot make a move for all the clients until they have each one's approval. It's an old dogfight vs. those that can't move as fast as those that can. You CAN time the market, not perfectly but enough to know when somethings oversold or overbought. The camp that says you cannot time the market does not have the nimble water-like fluidity and speed; nor discretionary power, that allows my partner John and other Portfolio Managers like him, with Discretion, to move in or out quickly without approval.
Advisors with Discretion are experts at the patterns and signs that asset classes, sectors, and even specific stocks are showing that it is time to EXIT or time to ENTER. This switching strategy created by John shows you not only can you time the market, you can be out of it before major downturns; reducing losses then returning when it's time to get back in, long before the news or anyone is psychology ready.

Refuse to give back your profits, be Scrooge. It's YOUR money and time put into earning and that is valuable.

It takes time and effort to study Technical Analysis. It takes more time, skill and mastery to know when to be in or out of the market. Often there's a mentor who shows up in your career, or even in your personal trading quest for knowledge that trains you and shields you from falling into psychological mind traps and costly errors. Remember, you are your own Portfolio Manager if your trading. There are many foundational concepts you don't understand when you are new. After a year of study and practice, you will suddenly see that there is so much more than you ever could have imagined involved in managing your own money.

Oh Look...Timing!

More Timing...558.3% Total Return vs. $SPY 208.6%

2. You need to be trading daily and often.

You do not need to day trade as the risk involved is higher and it doesn't decrease by making more trades, more often. Some day traders are certainly wizards. I know a few and they are well suited to this strategy and have spent a lot of time and maybe money in mistakes in fine tuning their strategies. People look at Day Trading as a way to make money faster and the group-think that your going to make more money than an expert because your doing it faster is poppycock. If you are new to investing or trading just doing something faster and more often does not mitigate risk, it exponentially increases it and chews through your portfolio with trade fees.

There is a high fail rate in day trading so doing it with your whole portfolio is definitely riskier than allocating a portion of it. Some people are just more suited to mastering mid to long term and swing trades and also do not want or don't have the time to spend all day watching ticks on a chart or the order flow. Some day traders do not watch all day, they get in and out and work very few hours each day.

There is a time to be IN the market, and a time to be OUT.

The old fishing quote that "there's a time to be fishing and a time to pull the nets" holds true. You do not always have to be trading. If you want to take short term day trades, reserve only a small portion of your portfolio for speculative trades. There is more risk and volatility in stocks under Five Dollars a share because large funds and institutions are not permitted to buy them, plus they attract speculators that...