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A lot of things have changed for me since I switched from being a trader to an investor want-to-be. I must have mentioned it before, that in the past two years of being in the market, I've learned more about myself than I could have imagined possible. I thought I already know myself quite well....well, in the face of the markets (whether in bullish or bearish times), you'll also see yourself in a different light, I'm sure.
Here's some of the lessons that I've paid to Mr.Market to tutor me. I think the lessons are not unique, as I'm sure many of those who had been in the market long enough would have known. Not in any order of importance, here it goes:
1. It's important to realise if you're trading or investing. This is especially important to those hybrids or those trying to convert from one to another. The worst that can happen (to me that is ) is that when you're investing, you start to trade your positions and flip it like burgers in a fast food joint. Or when you're trading, you start to hold it like an investor. Both methods have different entry points - for investing, you do want to get the lowest price possible but for trading, you might have to buy while the trend is up, not neccessary at the lowest price.
Take my painful longcheer lessons. I thought I'm investing, but when the price drops below my buy price, I do not want to take the losses. I convinced myself that I'm in for the long haul and tried to find 'fundamental' news that China is going to roll out their new 3G network soon. Didn't Warren Buffett buy and hold too?
Bullocks.
2. Take people's advice with a pinch of salt, or not at all. The advice is free, but whether it is applicable to you, only you can tell. This applies to all sorts of advice, including but not limited to those from your relatives, your close friends, experts, TV personality, financial advisors, brokerage reports and analysts. I'm asking you to be skeptical but not cynical - and that's a huge difference. Part of being open-minded is to allow yourself to be in a position of doubt, to be uncertain of your own situation and yet not be confused.
When I started out, I tried to get my hands on all sorts of brokerage reports. I thought that since I'm a newbie, who am I to question the professionalism and expertise of those reports. I believed, I bought, I suffered. As for analysts, if you can change your positions as fast as they can change their target price, go ahead and listen to their recommendations.
By the way, my blog is also contributing to the noise level. Read more...[caption id="attachment_1601" align="alignright" width="194" caption="Photo by walknboston"][/caption]
A lot of things have changed for me since I switched from being a trader to an investor want-to-be. I must have mentioned it before, that in the past two years of being in the market, I've learned more about myself than I could have imagined possible. I thought I already know myself quite well....well, in the face of the markets (whether in bullish or bearish times), you'll also see yourself in a different light, I'm sure.
Here's some of the lessons that I've paid to Mr.Market to tutor me. I think the lessons are not unique, as I'm sure many of those who had been in the market long enough would have known. Not in any order of importance, here it goes:
1. It's important to realise if you're trading or investing. This is especially important to those hybrids or those trying to convert from one to another. The worst that can happen (to me that is ) is that when you're investing, you start to trade your positions and flip it like burgers in a fast food joint. Or when you're trading, you start to hold it like an investor. Both methods have different entry points - for investing, you do want to get the lowest price possible but for trading, you might have to buy while the trend is up, not neccessary at the lowest price.
Take my painful longcheer lessons. I thought I'm investing, but when the price drops below my buy price, I do not want to take the losses. I convinced myself that I'm in for the long haul and tried to find 'fundamental' news that China is going to roll out their new 3G network soon. Didn't Warren Buffett buy and hold too?
Bullocks.
2. Take people's advice with a pinch of salt, or not at all. The advice is free, but whether it is applicable to you, only you can tell. This applies to all sorts of advice, including but not limited to those from your relatives, your close friends, experts, TV personality, financial advisors, brokerage reports and analysts. I'm asking you to be skeptical but not cynical - and that's a huge difference. Part of being open-minded is to allow yourself to be in a position of doubt, to be uncertain of your own situation and yet not be confused.
When I started out, I tried to get my hands on all sorts of brokerage reports. I thought that since I'm a newbie, who am I to question the professionalism and expertise of those reports. I believed, I bought, I suffered. As for analysts, if you can change your positions as fast as they can change their target price, go ahead and listen to their recommendations.
By the way, my blog is also contributing to the noise level. Read more...
[/caption]
A lot of things have changed for me since I switched from being a trader to an investor want-to-be. I must have mentioned it before, that in the past two years of being in the market, I've learned more about myself than I could have imagined possible. I thought I already know myself quite well....well, in the face of the markets (whether in bullish or bearish times), you'll also see yourself in a different light, I'm sure.
Here's some of the lessons that I've paid to Mr.Market to tutor me. I think the lessons are not unique, as I'm sure many of those who had been in the market long enough would have known. Not in any order of importance, here it goes:
1. It's important to realise if you're trading or investing. This is especially important to those hybrids or those trying to convert from one to another. The worst that can happen (to me that is ) is that when you're investing, you start to trade your positions and flip it like burgers in a fast food joint. Or when you're trading, you start to hold it like an investor. Both methods have different entry points - for investing, you do want to get the lowest price possible but for trading, you might have to buy while the trend is up, not neccessary at the lowest price.
Take my painful longcheer lessons. I thought I'm investing, but when the price drops below my buy price, I do not want to take the losses. I convinced myself that I'm in for the long haul and tried to find 'fundamental' news that China is going to roll out their new 3G network soon. Didn't Warren Buffett buy and hold too?
Bullocks.
2. Take people's advice with a pinch of salt, or not at all. The advice is free, but whether it is applicable to you, only you can tell. This applies to all sorts of advice, including but not limited to those from your relatives, your close friends, experts, TV personality, financial advisors, brokerage reports and analysts. I'm asking you to be skeptical but not cynical - and that's a huge difference. Part of being open-minded is to allow yourself to be in a position of doubt, to be uncertain of your own situation and yet not be confused.
When I started out, I tried to get my hands on all sorts of brokerage reports. I thought that since I'm a newbie, who am I to question the professionalism and expertise of those reports. I believed, I bought, I suffered. As for analysts, if you can change your positions as fast as they can change their target price, go ahead and listen to their recommendations.
By the way, my blog is also contributing to the noise level. Read more...
