“Fast Money” trader Tim Seymour wants to help investors avoid common money traps that could be exposed to losses, especially in volatile markets.
He has a list of four tips to bring a sense of security when things are moving south.
Tip No. 1: Don’t bring more money to the market than your stomach.
Whether it’s a margin call or anxious about losing money you can’t afford to lose, bad decisions are often made in hopelessness.
Tip No. 2: Don’t expect to go back to Breakeven.
If you just have a long position because you don’t want to lose money in trade, you risk losing more.
Conclusion: You own the stock based on merit, not on your wishes.
Tip 3: Don’t assume that yesterday’s investment rationale works tomorrow.
“Did something change in the basic case or is it a case of market volatility?” If something changes, make adjustments.
Tip No. 4: Don’t cut flowers and keep weeds.
Mostly, the highest quality companies are superior in the down market. Bad position? Returning to second place.
To get a more personalized investment strategy, take part in the next “Fast Money” live event on Times Square on Thursday, June 5th at Nasdaq.
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