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.

Click to email CW8888 or Email ID :

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.

Think Investing as Tug of War - Read more? Click and scroll down

Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Wednesday, 24 October 2012

Protecting our gains from the market actions???

Just For Thinking ...

Read? Jack Schwager Market Wizards Seminar Review

Martin Schwartz was formerly a fundamental analyst on Wall Street. After he become a trader, he managed to achieve an (audited) average return of 25% over a ten year period. Don’t let your jaws drop, it’s 25% a month and not 25% a year. This he did using purely technical analysis.

There were only two months that he lost money, once when he lost 2% and another when he lost 3%. However, Martin always took his profits and invested into treasury bills, so you do not see an astronomical compounding of returns.

Read? Jesse Livermore Money Management Rules

Rule 5: Take the profits in cash

Jesse Livermore felt that after a huge winning trade, you should take 50% of that and place it in cash. This money should be put aside in the bank, hold it in reserve, or lock it up in a safe-deposit box. I do not necessarily agree with this money management rule, because if you treat your investment wins as if they are going to eventually leave you, this must have some affect on your subconscious, which in turn will hurt your profits. I think if you put aside maybe 20% and then treat yourself to a nice dinner or a small shopping spree is better because it provides you positive reinforcements of your trading activities.

It is a shame that Jesse Livermore was unable to follow his own money management rules, because if he had, maybe his life would not have ended so tragically.

Createwealth8888's comments

Mr Bear, I am not going to give back all to you like in 2007.

No way!!!

No comments:

Post a Comment

Related Posts with Thumbnails