3 days until Christmas! I still got a ton of gifts to pack. Anyways……….
Once again, we’re back with the Random Thoughts on Investing series! I have a lot of thoughts to share, but since each of these thoughts aren’t long enough to devout to individual posts, I’ve grouped them all below. Enjoy reading!
A funny thing about investing.
In other industries, the harder you work, the more you want to make money, the more money you will make, because you have that drive to suceed. Not so with investing. Let me tell you a quick story. I have a friend, and he just came back from a 2 month vacation in China. He spent a total of $30,000 on that trip. So he comes back, and has a burning desire to make $30,000 off of the commodities market (he’s a gold trader). And within 3 weeks, he loses 30% of his portfolio.
Investing is a very peculiar job, career, or industry, whatever you’d like to call it. The more you want to make money, the more likely you won’t be making money. This is because of a simple mathematical formula. The greater your desire to make $ off the financial markets = less patience. Less patience = making more irrational decisions = losing money.
The difference between tops and bottoms.
The way the market forms at the top of a bull market is far different from the way markets form at the bottom of a bear market.
Tops are high volatility, and often form a heads-and-shoulders. Tops usually stay up there for a long time.
Bottoms are low volume trades, very fast, V-shaped recoveries.
Find what works for you.
This sounds very simple, and it is. Find what kind of an investor you are. My method probably won’t work for you, because the right investment method depends on a lot of factors. 1 – How much money do you have? 2 – What is your personality? What are your character traits? Are you very patient? Do you just want safety? Then you should just check the latest CD rates.
Honestly, the only way you’ll be able to find what works for you is to test things out.