3 Scary Investment Strategies
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It’s Halloween time, and in honor of Halloween, I thought I’d share 3 scary investment strategies:
- Following that “hot tip”: How often do we hear about a “hot tip” from someone that is just solid and will make you a great deal of money? However, just running after something that is “hot” is rather scary. By the time you get the tip, chances are that the things have cooled off. Indeed, in many cases, by the time you get in on the “hot” buy, it’s close to the top, and about to fall. Plus, who’s giving you this tip anyway?
- Frequent trading: While there are lots of people who make money with day trading, I find the whole thing rather scary. I’m more of a boring buy and hold kind of girl. Frequent trading can have tax implications (short-term gains are charged at a higher rate than most long-term gains), and frequent trading can cut into your gains with transaction fees.
- Market timing: Accurately predicting the market is impossible, so market timing is a tricky prospect. Waiting until just the right time buy can cost you, since you might miss a low. But what happens if you jump out just before something takes off? While there is no way to completely protect your portfolio, you can protect it to some degree by using a regular investment plan (such as dollar cost averaging to invest each month) and riding through the ups and downs. You may not get the same spectacular gains, but there’s a better chance that you’ll get steady gains over time.
What investment strategies do you find scary? Also, in honor of Halloween, I thought I’d share this video of Disney villains singing about money. Enjoy!
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
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