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think) have to offer longer-term investors? How can longer-term investors improve their return by incorporating some of the thinking and methods of short-term traders? These are the questions we will address in this chapter, in addition to some related issues. |
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Let's state one generalization that is easily overlooked in a high-flying market: It is one thing to be able to make money in a great bull market as we saw in the 1990s. It is another thing to be a disciplined trader who can make money when the market is more choppy or takes a prolonged downturn, either as a major correction or an outright bear market. The concepts presented here are offered to help broaden our thinking, so we can perform under varied market conditions, not just in a hot market when almost anything you pick stands a good chance of going up. |
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Balance has been the watchword throughout our exploration: Balancing different aspects of personality and trading approach; balancing isolation and information overload; balancing fear and greed, intellect and emotion, euphoria and shock; and balancing trading excitement and disappointment. We also need to balance and utilize the complementary forms of self-control. And we do this while walking the razor's edge of excellence without falling into the perfection trap. Is performing all this too much to ask? Not for the serious disciplined online investor, it isn't! |
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That's what the whole concept of discipline is really aimed atnot becoming rigid robots, but staying on a steady path that is always trying to balance upside and downside, and staying with a preset plan, not being unduly influenced by what others are doing. And not losing sight that when the see-saw goes too far up, the dynamics of market psychology demand that, sooner or later, it come back down. But when it's heading for the moon, the wishful fantasy is that it will last forever. And when it is going down week after week, it is tough to remember it will recover. |
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Long-term investors often buy stockswhether they be individual stocks or mutual fundswith little or no thought about what kind of return they are looking for. They may fantasize how much they'd like to make but don't really determine a set price or a strategy. Perhaps they like a company, know something about the products or management team, and buy the stock not only because they think it's a good investment, but because they like the idea of having a |
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