How To Sell September 28, 2009

We’ve said it before here at BMB, a number of times. Many investors are more than willing to choose how and when to buy stocks — but very few are good at, or even capable, of selling them.

If you don’t know how to sell (and that includes accepting losses, if necessary), it’s time you learn:

Buy Low. Sell High.

Sounds pretty easy, but as the man says, “not so much.” In the past few months many, if not all, of you have bought low. Not so hard to do after a monumental crash. Now comes the tougher part of the equation: selling high.

As a licensed securities broker for the past 26 years, there’s one thing I’ve come to know as a certainty, and that is this: Very few clients know when or how to sell a security. In working as a branch manager and securities company owner for 17 of those years, I can also say with confidence that very few brokers are any better at it. There are many reasons you might want to buy a stock: personal research, a nice article in Minyanville, a hot tip from your barber, and so forth. And it’s so easy, so exciting to buy. Each new idea is a “can’t miss” investment. But why do we sell a stock? And more importantly, when should we sell it? Let’s talk about that a bit.

Click here to read more…

Holiday September 7, 2009

Today might be a good time to remind ourselves that there’s more to life than trading and the markets:

Trading is tough and intensive work. Like all labor, it is demanding, and traders need to take time to reward themselves. I want each of you—no matter how much you are struggling—to consider taking something out of your trading account or any other income that you have at least four times a year, put some it into savings for a special goal or new opportunity, and use some to have a wonderful experience. Take a long weekend vacation, go camping or hiking, take someone you care about with out to a great restaurant for a romantic dinner. If you want to stay home and hang out with your family then take a stay-cation and maybe throw a party for friends. Turn off TV, unplug your computer, pick up the phone and call someone you have been thinking about for a while. Spend quality face-to-face time with people. Rent some DVDs and have a movie holiday. Take a course at a community college in cooking, language, art or something that appeals to you. Work out, dance, move and feel yourself alive. Treat yourself to a pampering day at the spa. Do something really nice for yourself or those you love. Give to others who are needy. Help someone—even if it is a small random act of kindness. Give money to your church or your favorite charity. It feels wonderful, helps others, strengthens you and makes you a better person and a better trader with a much stronger presence—both in life and in the markets.

Set goals outside the markets and reward yourself with experiences. If you do this regularly, you will find that many aspects of your life and trading change in remarkable and surprising ways. Life is short and precious. Think about starting soon. If not now—then when?

The good doctor forgot to mention ‘watch as much football as you can possibly stand’…