You’ll want to read this article about making smart investing choices.  If you’re handling your own stocks and buying and selling is reactive you’re going to be hosed anyway.  Reactive investing is always after the fact.  It is important to look at the tools that you have and determine your investing strategy - winging it is like a controlled crash!  You may come out alive but you’re not in control.  I lost a big chunk of money winging it and that’s part of what is pushing me to learn and write on this very site.  If you’re trading your own stocks or options use the tools that your online broker offers - at OptionsXpress.com, where I have traded in the past, they have various tools that will trigger a sell order upon certain events, its not reactionary, its pre-determined.  Its reactionary in the sense that the software reacts to events, but its not you doing it because the guy on the elevator mentioned to someone else that they sold, or that your broker calls up after you’ve lost 5% of your portfolio value and says, “I’d like to limit your losses by selling out now.”

Figure out your strategy, I recommend developing a pyramid investing strategy for diversification and safety reasons, and stick with it, put safety measures in place and don’t get flaky, emotional or inconsistent with your investments.   Read the article I linked to above and see the mistake that thousands and thousands of people made just last week, avoid the mistakes others have made and get smart.  Don’t take on risky investment strategies in an already risky market (because the market always has risk, not because this time or any other time is better or worse), be methodical, strategic and determined.

What safety precautions do you have in place?

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This entry was posted on Monday, July 30th, 2007 at 5:16 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.