Trade Like an Experienced Investor The intense fear and dread that investors feel in a crash or a major bear market are hard to imagine until you've lived through a few. Newbies look at historical stock market charts and casually point out all the great buying opportunities in those silly old, temporary bear markets. They have little understanding of the terror that gripped millions of investors at the time. Or how selling seemed like the smart move... and buying not just foolish but crazy. I'm not suggesting that investors should hang on to all their stocks through every downturn. There is often a big difference between how the market averages behave and how the individual stocks in your portfolio do, especially the smaller ones. (Remember, markets bounce back. But not every stock does.) Long-term investors - who can ignore short-term market fluctuations - are generally well served by a buy-and-hold strategy. But short-term traders - who seek to capitalize on short-term market fluctuations - need a sell discipline. For Oxford Club Members, that means trailing stops. In our Oxford CommuniquΓ© Trading Portfolio, for example, we sell any stock that drops 25% from its closing high. No exceptions. Yet in this year's correction - and small cap bear market - we have stopped out of just one stock. (We sold Perficient for a 26% gain in just over four months.) In our VIP Trading Services - where we use tighter stops to protect our principal and our profits - there has been more activity. And, of course, increased volatility might mean more stops are triggered. In the financial crisis of 2008, for example, we stopped out of all 45 recommendations in our Oxford Trading Portfolio, with an average gain of 29%. (And that was a year when the S&P 500 plunged 38%.) However, we are at zero risk of being completely out of stocks when the market bounces back from a bottom. It's not just that we quickly rebuilt our Oxford Trading Portfolio in 2009 and beyond - and profited immensely from the 11-year bull market that followed. We also have three other strategies - our Gone Fishin' Portfolio, All-Star Portfolio and Ten-Baggers of Tomorrow Portfolio - that don't use trailing stops. That means we will always have money at work in equities when the market puts on a significant rally. In short, Oxford Club Members profit from a simultaneous bull market and bear market by owning high-quality companies, diversifying broadly, asset allocating properly and using trailing stops judiciously. That leaves us well prepared for the future. No matter what it throws at us. Good investing, Alex | 
Tidak ada komentar:
Posting Komentar