You a "The investor feels good"?

This is not bad. Feel -Good investors buy stocks because they feel good either in the stocks or in the companies that issued them.

Investors who feel good are driven by emotion, not some financial acumen.

This is not a bad way to choose stocks. It may not be optimal, and may not be the most profitable, but it’s not a bad way.

Let me tell you about an experiment conducted a few years ago.

A group of researchers wanted to know how random the stock is actually.

They “ordered” the monkey to throw the darts into the stock page.

They then followed the companies that were “chosen” by the monkey.

After tracking randomly selected companies throughout the year, they concluded that companies that selected monkeys had better results than the S&P 500!

It’s a really scary thought: pick a random pack of stocks and you can beat the market!

Which shows that the market as a whole can be seen as a random collection of random events.

Our challenge: “How to profit from those seemingly random events?”

Accompanying task – “When to sell?”

You don’t make money if you don’t sell stocks. Simply keeping a growing stock can make your net worth look good on paper, but you can’t take that paper to the grocery store and buy dinner!

Only if you sell. Or if you collect dividends from these stocks.

Now we have two tasks:

  1. What stocks to buy?

  2. When to sell these shares?

Another general rule: “Don’t plan to keep these stocks forever.” Nothing lasts forever. All you can do is maximize profits.

Another thing: the stock market is now supported and controlled by investors of institutions that control billions of dollars of shares.

You can’t beat them.

But you can make a profit from them.

Can I tell you a little story?

For several years I tried to “break the table” behind tree tables in Las Vegas. But I had very little money and even less knowledge. I noticed that one player had a very large stack of very large chips. And he kept increasing his horde. So I started imitating his “bidding”. When he put the chips in position, so did I. When he raised his position, so did I. And I started accumulating chips. Having no vague idea of ​​what I was doing, I was actually making money!

Then, thinking I knew something about shit, I moved to another table and you guessed it, put everything back in my casino pocket, plus a few more!

Morality? Don’t try to guess the experts. But you can make a profit by following them.

This leads to my first observation about the stock market: because of the “Lucky Beginner” phenomenon, amateurs can work better than the average individual investor.

As your knowledge grows, your unreasonable confidence also increases, and you can quickly find yourself [hindsight] terrible decisions. Until you become as savvy as an institutional investor, you may fail.

Even professionals are constantly failing. See how many “professional” hedge fund managers don’t work. See how many stock traders have lost their collective rears.

And on the other hand, look at how many multibillion-dollar homes were saved because they were “too big to fail”.

So, my advice to you: create a set of trading rules that will suit you. Follow them religiously until they start letting you down. Make adjustments as needed.

Properly chosen rules of trade do not fail: the principles are universal, but they must be carefully followed.

My personal trading rules are very simple:

  1. Select shares that pay dividends, according to a set of fixed parameters.

  2. Establish “selling” rules according to strict parameters.

  3. Set strike-stop orders to protect your profits.

  4. Remove emotions from your trades as much as possible. Never fall in love with stock.

Do my rules apply to me? Yes. My goal is to achieve a monthly dividend income of $ 2,500 before taxes in less than ten years. In just five years of trading, I have achieved a monthly dividend income of $ 1,800. I am on goal to achieve my goal.

My starting dividend position five years ago was just $ 208 a month.

Because you benefit from my mistakes, you can easily achieve greater returns!