As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
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Technical Analysis and Charting
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Saturday, 30 January 2010

Does Your Account Size Matter? - Part 2

Does Your Account Size Matter? - Part 1

The wealth of the stock market is locked by more than one key so you will need more than one key to unlock it.

Capital is the first key to successful investing/trading. Holding power is the second key. Without holding power, you are more likely to panic sell during market volatility and causing you to lose money.

But, some people will tell you that holding on losing positions and sitting on paper losses will cause you opportunity costs.

True or not?

What if you still have some available investing capital at hand? What is your opportunity cost? Your opportunity cost for holding on to the losing positions is the current interest rate and nothing more as you still have money to invest in the stock market or other financial instrument.

It is only when you have zero capital left to invest, then you have to seriously consider what is the opportunity costs of holding to those losing positions?

It may be better off for you to bite the fingers to cut losses on some losing positions to recover some capital to invest.

In 2008 Greater Bear, I have used up all my investing capital and left with zero cent. I too bite my fingers and cut losses to recover some investing capital even though I don't have stop-loss strategy. The truth is that you don't need to win back in the same way that you have lost. 2009 Year End Performance Review

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