I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

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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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Friday 14 January 2011

Have you spend enough time thinking on your money management stratgeies? (2)

How many investors spent enough time seriously thinking about Money Management strategies?

I believe most investors tend to spend more time thinking on Method and trying to improve it; but don't forget that Money Management is important too.

Read? Have you spend enough time thinking on your money management stratgeies?

Two of Jesse Livermore’s Money Management Rules

3) Keep cash in reserve.

The successful speculator must always have cash in reserve.. .for exactly the right moment. There is a never-ending stream of opportunities in the stock market and, if you miss a good opportunity, wait a little while, be patient, and another one will come along. J.P. reach for a trade, all the conditions for a good trade must be on your side. Remember, you do not have to be in the market all the time. The desire to always be in the game is one of the speculator’s greatest hazards. When playing the stock market, there are times when your money should be waiting on the sidelines in cash.. .waiting to come into play. Time is not money — time is time, and money is money. Often money that is just sitting can later be moved into the right situation at the right time and make a fast fortune. Patience is the key to success, not speed. Time is a cunning speculator’s best friend if it is used wisely.

5) Take the profits in cash.

I recommend parking 50 percent of the profits from a successful trade, especially when the trade doubled the original capital. Set the money aside, put it in the bank, hold it in reserve, or lock it up in a safe-deposit box. Like winning in the casino, it’s a good idea, now and then to take your winnings off the table and turn them into cash… .the single largest regret I have ever had in my financial life was not paying enough attention to this rule. (Createwealth8888 likes the ideas of "Money in the Pocket " as money in the pocket is always safer than capital in the market.)

1 comment:

  1. Thanks for sharing!

    I've learnt the hard way too by applying blindly "trading rules" that I have not internalised into my own psyche.

    Ya, I've learnt that let profits run makes a lot of sense only when I can predict the market top..... If I can't, then taking some money off the table is another form of money management technique to "protect" my paper profit.

    Of course some may prefer to hedge with other strategies - like shorting with CFD or futures contract. Or do pairs trading.

    I've tried all of them, and found taking some money off the table works best for me. Much simpler!


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