Aaron shared 4 time honoured rules:
1. If you can't take the heat, get out! This is something I did not talk about but I have said time and again that investors should just do what they feel comfortable with. Anything we are not comfortable with, avoid. Aaron is quite specific in who are the people who should get out.
2. Don't panic! This one sounds very familiar. Aaron says that many investors simply cannot take the pain and are cutting and running. Historically speaking, many investors sell out of stocks at important market bottoms. This is a reason why I refuse to sell when prices are forming new lows and would only sell if they rebound to test resistance. Aaron is quite specific in who are the people who should not panic and should stay the course.
|The 8 immortals each had his or her own way of crossing the sea.|
3. Have a plan! Sounds familiar again. Aaron says it differently from me but the essence of the message is the same. We must understand our motivations for investing in the stocks we are invested in. The tools we employ and the attitude we have must be appropriate to our motivations. That way, we will stand a good chance of doing better with a consistent strategy and this is so both financially and emotionally!
4. Learn from your mistakes! Do we need to say more about this? Life is about learning and more learning. Regular readers would know that I am still learning and would have read my story. New readers might be interested in reading this: Excuse me, are you an investor?
Aaron ends his article by asking us to ask ourselves three questions, go read his article and see how you would answer these three questions. Could be revealing. Enjoy "4 rules for the see-saw market".