Thursday, March 20, 2008

Investment Psychology (Won01)

The stock, bond, options, commodities, and futures markets will be around next Friday, next month, and next year. We advise our readers to never be 100% invested in any one market or individual investment at any one time, ever. We've experienced maximum pain, loss, and stress before and learned from it. The Psychology of the Call team goal is for our readers to never experience what most of the "herd" experiences when markets go against them.

Investment Psychology (Won01) takes the emotion out of trading. We offer you a more scientific & mechanical approach that focuses on the Eleven Commandments. We want our readers to obey them in bull, bear , even stagnant markets. Please, please, please obey The Eleven Commandments and as you do, your faith in investing will sky rocket, especially in times of volatility and great angst such as the one we just witnessed with Bear Stearns. Commandment 10 warns of these events/shocks/inversions; they happened before and will happen again.

Quick question: Has the manager of your mutual fund called and updated you lately? We're sure he/she won't be calling our team for advice, although we welcome all. Think twice before signing over your investment account to one expert advisor, broker, or fund manager, especially when you hear buzz words or phrases like:

"The whole market is down". That's nothing more than an excuse for subpar performance. Afterall, has he/she ever heard of making money on the short side, or the Bond market?

"Buy and Hold". This traditional investment philosophy no longer works, with trading costs so low compared with in the past. Remember Commandment 1: "Never fall in love in any one investment or stock.

"Long-Term". The only things guaranteed to be long term are death and taxes

"Mutual Fund" When the fund loses money, you still pay for the bad advice, ridiculous!

There are many more buzz words used to attract your money/account, so our readers should never become conditioned and juked by outdated lingo and gibberish. If you can think of any other buzz word(s) that you find obsolete in the "traditional investment arena", please comment below and we'll add them to our list. Investment Psychology (Won01) is now simpler than you thought. It involves strict adherence to the Eleven Commandments, nothing else, nothing more. The Psychology of the Call team wants to thank you for letting us be ourselves, again.

The Eleven Commandments Of Trading

1. Never trade more than 10% of your total capital/account value in any one position.
2. Cash is King.
3. Cut losses to 15% maximum whenever possible. If your psyche is shaken, step away and don't trade for 1 week.
4. Take and enjoy profits of 30% or more.
5. Never fall in love with a stock and never force trades or over trade; remember commandment #2.
6. Never accept excuses from management, period.
7. Use technical and fundamental data & psychology/sentiment from the conference call to select trades.
8. There are two sides to the market, long & short; take advantage of that leverage.
9. Understand the significance of the macro geo-political economic environment.
10. Unforeseen events/shocks will happen, inverting the market upside down (remember commandments #1 & #2)
11. All of the above are void without reading the Psychology of the Call.

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