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The logic of this plan is basic and has stood the test of time in any multi-party market. You can save and spend at the same time, I do it all of the time, it'
by throwaway_1010 11y ago
The logic of this plan is basic and has stood the test of time in any multi-party market. You can save and spend at the same time, I do it all of the time, it's called budgeting. You are mired in theoretical perfection, absolutism, and a misunderstanding of how to profit from investing or trading. On the Street this "plan" is referred to as "Keeping the Powder dry". You don't [rationally] blow the whole keg of powder on one trade. If I have $10k to invest, I might only invest ("fire", "blow", "shoot" )$2k at a current market/stock low and keep the rest "dry". What is your investment strategy? Invest at the market/stock highs?
According to...people that have actually invested. Some positions lose money, some make money, but you'll never know what it's like until you get off the bench and put some skin in the game. Always be comfortable with losing what you invested, because you might lose it. Always be comfortable with taking a profit, because you might lose it.
- zardo 11y ago>What is your investment strategy? Invest at the market/stock highs? I try to keep in mind that markets are unpredictable, and missing out on growth while you wait for the next crash can cost you money too, even if it doesn't feel as bad as a position you hold losing value. I invest about the same amount every paycheck whether people are crying bear, bull, bubble, or apocalypse.
- throwaway_1010 11y agoSuccinct. Exactly. Dollar Cost Averaging. For buys and when buying call options or selling puts, I increase commitment while maintaining the core strategy. Highs and lows are arbitrary in an irrational market. Profits can be increased if buying at "relative" lows or selling at "relative" highs. If a stock that trades at its highest yet value of $100/share falls to $80/share over a week because of a lawsuit claim or other similar construct, but the company is otherwise outperforming, that may be a buying opp (it may be a total loss, but that differential is risk/opportunity). That stock, at $80/share is at a "relative" low as compared to its high of $100. That is what I meant by low and high. Perfect maximization is possible, though almost always unlikely. Which is why your DCA strategy should outperform (depending on your investment choices, of course).
- forgetsusername 11y ago>"On the Street this "plan" is referred to as "Keeping the Powder dry". Oh, I know what it's called "On the Street". And it's bull. >You can save and spend at the same time, I do it all of the time, it's called budgeting." Huh? >$2k at a current market/stock low and keep the rest "dry". But why just $2k? That might be the bottom, and then you've missed out putting those dollars to work. >What is your investment strategy? Invest at the market/stock highs? I can't predict the highs or the lows, just like you can't, so it's not part of any strategy I implement. >According to...people that have actually invested. You mean me? I've even done it for a living, with other people's money. Imagine that. >Always be comfortable with losing what you invested, because you might lose it. I get it now, you're just a random spouting aphorisms you've read.
- throwaway_1010 11y agoUn-invested money can still earn interest or be put into other profitable, but less risky vehicles. I do not know any professional traders or investors that put 100% of their money for investments in one trade. >I get it now, you're just a random spouting aphorisms you've read. Yeah, those aphorisms, with their pathetic grains of truth, what a fool I am.
- throwaway_1010 11y agoTroll, Google my "aphorisms" in quotes. I don't seem to come up with any results in google. I'm not a genius, I didn't come up with the concepts of "Keep some Powder dry", "Buy low, Sell high", or basic arithmetic. You offer exactly nothing in terms of "strategy". I'd love to see your Series 7 exam results. "Always be comfortable with losing what you invested, because you might lose it." - Google it.