Four Ways To Becoming A Better Investor

Marshall Loeb on Market Watch has some advice one four ways to become a better investor.

1) Invest in businesses, not stocks - Invest in companies you know about and think will stand the test of time.

2) Don't go outside your comfort zone - Stick to what you know and companies that you feel comfortable in.

3) Go against the grain - Don't follow what everyone else is doing, do your own thing. By not following the pack, you may do better than the rest.

4) Don't be afraid to do nothing - sit on your stock for a couple of years, don't trade in and out of your stocks, it could lead to losses.

This advice is pretty good, seeing that the market is down. Instead of getting out and losing money, stick with the companies that you have some kind of knowledge of and wait for the turn around.

Investing Problems

So my investments aren't doing so hot. I didn't get out when I should have and my stocks dropped big time. Now I'm stuck either waiting for them to go back up or getting out at the bottom and trying again. So basically I get the shaft both ways. I think I will wait it out and see that it hopefully gets back up to where I was at. Now you know why I am an amateur investor. Oh well, each mistake is a learning experience.

Rule #1 Update

Well I've been using Phil Town's Rule #1 method and in five months I've made 10% on my investment. Not bad in my book, I still have 7 months to go. I probably would have done better, but I make a couple of stupid amateur mistakes second guessing myself and the technical signs. So I hear ten percent is kind of the market average, so everything else from here is gravy. As long as Phil Town's method keeps working I will continue to use it, anyway I said that I would give it a year. We will see what happens and I will keep you posted on my Amateur investment progress.

Tags: Investing Rule #1

Carnival #75 Is Up

Thanks to Everybody Loves Your Money for hosting Carnival of Personal Finance #75. Also Thanks for including my article on Rules to Get Rich By. Definitely check out the carnival the set up is very interesting. Don't you love used car dealers? I will pick out some of my favorites from the front and back lots and post their links here later. So don't miss out on the Carnival, you may get some good deals. Okay here is one of my favorites from the Front Lot - Rule #15 all or nothing by My Open Wallet. A lot of times we forget to look around and smell the roses. Here is another good one by Geniustypes.com called See Money Differently to Attract More. Only a couple for now will add more later.

Forex 101

So since I am starting to get interested in Forex, I figured I would write about some of the basics that I've picked up. First of all Forex or Foreign Exchange Market deals with trading currencies with other countries or other countries currencies. The Forex market is also highly liquid, you can get in and out fairly quickly because there are always willing buyers. The Forex market is opened 24 hrs a day from Sunday afternoon to Friday afternoon. So you can pretty much trade anytime day or night you get the urge. "There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation"(KingCommodities.com). In the Forex market you can also buy on margin or leverage. On Forex.com for a $250 account you have leverage of 200:1. That means basically that you could trade for up to $50,000 with a $250 account. This is the part that sounds like trouble to me. I think buying on margin could be a little risky. Anyway here is my disclaimer. I know absolutely nothing about trading on Forex, so I am not giving out any advice, I am just commenting on some stuff that I have learned because I would like to get into Forex trading. Please leave any comments if you can give me some advice on Forex Trading or if you know of a book that I could buy. Thanks.

Discipline and Determination

From reading other blogs and personal finance articles I've found that to be successful you have to be disciplined and determined. First you need to have discipline, stay away from buying stuff that you don't actually need. Also try to get the best price for the things that you do need. Discipline and Determination will also get you plugging away towards what ever goals you have set for yourself. This works for Personal Finance, Debt Reduction, and Investing. From just reading other peoples blogs I've found out that there are a lot of determined people out there, which is good because it helps me stay determined to reach my goals. So to all of you personal finance bloggers, keep up the good work and Thank You.

Investing In Stocks and Personal Morals

I was watching Jim Cramer on Mad Money over the weekend. Not that I follow his investing style, but I do think he's great and knows how to put on a show. Boo-ya. Any way he was talking about investing in DEO. Diagio PLC (DEO) distributes branded alcohol Ala Johnny Walker, Jose Cuervo, Bailey's, Captain Morgan, etc.... I didn't run the numbers, but he seemed to like it, 10% per year consistently. What came to my mind though was the morality of investing in these companies, such as Phillip Morris. I don't know if I would invest in either of these companies even though Diagio is the less of the two evils. What are your morals when it comes to investing in stocks. Does it matter if they hurt anyone or just that they make you money? Personally I think I will stay away from these companies and others. I like environmentally and people friendly companies. What are your thoughts?

My Investing Progress

So being an Amateur Investor, I really haven't said much about my experiences since I started this blog. I read Rule #1 by Phil Town and have been trying to follow his system. I got in with a good margin of safety and with a company that I feel I know and understand. The stock was on an uptrend and doing pretty well, but with all the craziness in the market it dropped like a stone. Well I can't buck the system because the signals were there to get out, and I second guessed them. So anyway I was looking at the stock bottom out and was thinking, what have I got myself into. Though I was very tempted to get out, I decided to stick. Like Buffet's value investing, I knew that I had a good company, at a good price and that it would eventually rebound. Well the stock reversed and is on an uptrend again and I am about to break even. So I guess the moral is don't second guess, don't be emotional, and don't jump in and out at the wrong times. Even though I haven't made my mind up about the Rule #1 system. I figure I will give it a year to see how I do. I like Phil Town because he is pretty straight forward, he is very active in his blog, and will answer any questions that you have. Being new to investing I plan on continuing to learn all that I can. So one of these days I can graduate from amateur investor to mediocre investor.