{"id":13277,"date":"2010-09-23T11:25:47","date_gmt":"2010-09-23T15:25:47","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13277"},"modified":"2010-09-23T11:25:47","modified_gmt":"2010-09-23T15:25:47","slug":"the-three-things-you-must-do-to-be-a-successful-investor","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/23\/the-three-things-you-must-do-to-be-a-successful-investor\/","title":{"rendered":"The THREE Things You Must Do to Be a Successful Investor"},"content":{"rendered":"<p><a href=\"http:\/\/www.taipanpublishinggroup.com\/tpg\/smart-investing-daily\/smart-investing-091710.html\" target=\"_blank\"><span style=\"text-decoration: underline;\">The THREE Things You Must Do to Be a Successful Investor <\/span><\/a><\/p>\n<p><span style=\"color: #888888;\">By Jared Levy, Editor, Smart Investing Daily<\/span><\/p>\n<p>In over 15 years of trading, investing and risk management, I  realized the three things that make the real difference between a  successful investor and one who struggles have nothing to do with  technology, strategy or even a personality type (although some  personalities have an easier time applying them).<\/p>\n<p>I mean, when you think about the multitude of successful strategies  and investments that are made every day, there may be some common  threads between them, but with all the diverse and sometimes conflicting  methods used, how can they all be the key to successful investing?<\/p>\n<p>They can&#8217;t&#8230;<strong><\/strong><\/p>\n<p>Here are a few smart investing ideas for you to remember:<br \/>\n(And by the way, none of these ideas are the three strategies you have to follow to be truly successful.)<\/p>\n<ul>\n<li>Acquire stocks when they seem to be cheap (or more importantly,  valuable) on a fundamental and technical basis. This is sometimes  achieved when the rest of the market is in a panic selling mode.<\/li>\n<li>Buy bonds when yields are high (when monetary policy is tight, but expected to loosen).<\/li>\n<li>Purchase soft commodities when they are at relative historical low  values (perhaps at the end of an economic contraction) and increased  demand is on the horizon.<\/li>\n<li><a title=\"Go to article: An Easy Way to Buy Real Gold in Your Brokerage Account\" href=\"http:\/\/www.taipanpublishinggroup.com\/tpg\/smart-investing-daily\/smart-investing-081310.html\" target=\"_self\">Buy gold<\/a> and dollar-denominated commodities like oil when increased inflation is on the horizon and before certain seasonal rallies.\n<ul>\n<li>Gold before September<\/li>\n<li>Oil before spring and summer (ahead of driving &amp; hurricane season)<\/li>\n<\/ul>\n<\/li>\n<li>Diversify your portfolio, not just with stocks in different industry  sectors, but with stocks that have different Betas (Beta tells you how  volatile a stock is in relation to the market) as well as a blend of  defensive and cyclical stocks when appropriate.\n<ul>\n<li>Of course, a further mixture of commodities, bonds and options in  your portfolio will add even more levels of diversity and increase your  chances of beating the biggest fat cat fund managers (most of them can  barely beat the S&amp;P).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>All of these techniques, plus the multitude of tactics and trades that Sara and I offer in <em>Smart Investing Daily<\/em>, will give you an edge. (That said, if you&#8217;d like to receive our advice, sign up for our <a title=\"Sign up for Smart Investing Daily\" href=\"http:\/\/www.taipanpublishinggroup.com\/free-signups\/splash\/sid-video-su2.html\" target=\"_self\">easy-to-understand investment articles<\/a>.)  But even following these practices I&#8217;m sorry to say you can still lose.  Because without the following three covenants, you are surely doomed.  Let me explain&#8230;<\/p>\n<div>\n<div>\n<blockquote><p><strong>How Gov&#8217;t-Sponsored &#8220;pShares&#8221; Could Hand YOU 808% Gains Within the Next 12 Months<\/strong><\/p>\n<p>As the U.S. government continues to funnel money into an industry  most folks have foolishly left for dead&#8230; little-known &#8220;pShares&#8221; are  shooting up as much as 808%.<\/p>\n<p>Here&#8217;s how to claim your share of these <a title=\"Learn More About New Growth Investor\" href=\"https:\/\/orders.taipanpublishinggroup.com\/TAI\/ETAIL814\/\" target=\"_blank\"><strong>govenment-sponsored options<\/strong><\/a>.<\/p><\/blockquote>\n<\/div>\n<\/div>\n<h3>#1 \u2013 DON&#8217;T FORGET TO TAKE PROFITS!<\/h3>\n<p>Far and away, the most important thing you can do as an investor is  to have an END to your trade, preferably a profitable one! Most novice  traders jump into a trade with good intentions, but don&#8217;t have a goal to  reach.<\/p>\n<p>When you buy any investment, set a target for yourself (be realistic)  and once you reach that target (or if the market seems to be changing)  exit the trade! Even with all the great techniques listed earlier, they  all mean nothing until the profits are booked in your account!<\/p>\n<h3>Use Trailing Stops to Help<\/h3>\n<p>A relatively new &#8220;order type&#8221; that most brokers offer nowadays is  called a trailing stop. It can help mechanize your trade and assist in  taking profits for you, especially if you have a hard time hitting the  &#8220;sell&#8221; button. Think of it as a stop-loss order that follows your stock  price up, but not down.<\/p>\n<h3>How It Works<\/h3>\n<p>Let&#8217;s assume I buy a stock at $40 and place a $1 <a title=\"Go to article: Trailing-Stop Techniques\" href=\"http:\/\/www.investopedia.com\/articles\/trading\/03\/080603.asp\" target=\"_blank\">trailing stop<\/a> below it. If the stock moves up to $45, the stop moves up with it and  is still $1 below the current stock price (the stop is now at $44). If  the stock drops, the trailing stop locks in place and my stop loss will  trigger at $44, taking me out of the trade for a profit! Cool, right?<\/p>\n<h3>#2 &amp; 3 &#8211; DON&#8217;T BE GREEDY AND FOLLOW YOUR PLAN!<\/h3>\n<p>Call them the &#8220;<strong>trifecta<\/strong><strong> to profit&#8221;<\/strong> or whatever you need to remember them, because they might just save you some dollars.<\/p>\n<h3>A Friend Who Broke All the Rules<\/h3>\n<p>I have a close friend who has been an extremely successful trader on  Wall Street for many years. He has made a living his entire life trading  his own account.<\/p>\n<p>He called me on Friday, Sept. 3, to discuss a bullish option <a title=\"Go to The Swing Trading Guide Website\" href=\"http:\/\/www.swing-trade-stocks.com\/\" target=\"_blank\">swing trade<\/a> (swing trades usually last one to three days) he had on in CREE. He was  up about 20% in the trade in less than a week (which is about 1,000%  annualized, but let&#8217;s not go there). I urged him to sell it, which he  did and he was more than happy with his realized return and that his  profit target was reached.<\/p>\n<div>\n<div>\n<blockquote><p><strong>Charting Guru Shows You How to Turn $5,000 Into $1.2 Million in 5 Simple Trades!<\/strong><\/p>\n<p>Hidden in the shadows of the stock and mutual fund markets&#8230; a  little-known sub-niche is generating gains of 4,233%&#8230; 5,760%&#8230;even  7,285% in a single trade! Act now, and you could see a cool $1.2 million  in five simple trades.<\/p>\n<p>Get all the details in this <a title=\"Learn More About PowerSignal\" href=\"https:\/\/orders.taipanpublishinggroup.com\/WPS\/EWPSL904\/\" target=\"_blank\"><strong>investment research report<\/strong><\/a>.<\/p><\/blockquote>\n<\/div>\n<\/div>\n<h3>And Then&#8230;<\/h3>\n<p>The day after Labor Day, CREE dropped from $57 to $54 and boy, was he  happy. Seeing dollar signs and ignoring his rules, he jumped all in  with a position that was twice the size of what he just took off. He did  this when the charts were NOT looking bullish at all and ADDED RISK!<\/p>\n<p>On Wednesday, he now had a big problem, because the stock was trading  down to $49 and he was long the equivalent of 10,000 shares at a much  higher price.<\/p>\n<p>Now the tide shifted \u2013 he went from being in complete control to  hoping, wishing and praying the stock would move higher and feeling  bitter because he just made a great return in the stock. Luckily, the  stock rallied a bit and he was able to trade his way out for a little  better than breakeven.<\/p>\n<p>The moral of the story is that his first trade was a successful one,  because he executed his plan, used good money management (controlled  greed), and took a profit when he reached his goal and the stock was  looking weak.<\/p>\n<p>The second trade was done in an excited, uncontrolled state of mind with no plan and poor money management.<\/p>\n<p>In your own account, monitor how much money you put into any  investment and don&#8217;t be afraid to take a profit if you are happy with  your returns. There will always be another trade!!!<\/p>\n<p>Don&#8217;t forget to follow us on <strong><a title=\"Become a fan of Taipan Publishing Group on Facebook\" href=\"http:\/\/www.facebook.com\/pages\/Baltimore-MD\/Taipan-Publishing-Group\/220337511074\" target=\"_blank\">Facebook<\/a><\/strong> and <strong><span style=\"text-decoration: underline;\"><a title=\"Follow Taipan_Trader on Twitter\" href=\"http:\/\/twitter.com\/taipan_trader\" target=\"_blank\">Twitter<\/a><\/span><\/strong> for the latest in financial market news, investment commentary and exclusive special promotions.<\/p>\n<p><strong><em>About the Author<\/em><\/strong><\/p>\n<p>Jared Levy is Co-Editor of <span style=\"text-decoration: underline;\"><em><a title=\"Sign up for Smart Investing Daily\" href=\"http:\/\/www.taipanpublishinggroup.com\/free-signups\/splash\/smart-investing-su.html\" target=\"_blank\">Smart Investing Daily<\/a><\/em><\/span>,  a free e-letter dedicated to guiding investors through the world of  finance in order to make smart investing decisions. His passion is  teaching the public how to successfully trade and invest while keeping  risk low.<\/p>\n<p>Jared has spent the past 15 years of his career in the finance and  options industry, working as a retail money manager, a floor specialist  for Fortune 1000 companies, and most recently a senior derivatives  strategist. He was one of the Philadelphia Stock Exchange&#8217;s  youngest-ever members to become a market maker on three major U.S.  exchanges.<\/p>\n<p>He has been featured in several industry publications and won an Emmy for his daily video &#8220;Trader Cast.&#8221; Jared serves as a CNBC <em>Fast Money<\/em> contributor and has appeared on Bloomberg, Fox Business, CNN Radio, <em>Wall Street Journal<\/em> radio and is regularly quoted by Reuters, <em>The Wall Street Journal<\/em> and Yahoo! Finance, among other publications.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In over 15 years of trading, investing and risk management, I realized the three things that make the real difference between a successful investor and one who struggles have nothing to do with technology, strategy or even a personality type (although some personalities have an easier time applying them)&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13277","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=13277"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13277\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}