There are too many questions and concerns about where the market will be in the next week or the next month. Should we buy into December where we normally expect a rally? Should we sell until Dubai fixes their debt problems? These are not the questions we should be asking ourselves. We should be investors, not traders.
Traders are the smart guys on Wall Street with years of experience and millions of dollars invested in the market at any given time. They buy and sell on knee-jerk reactions as news comes out to the investing community. Investors are ordinary, longer term oriented guys who want to keep stock for longer periods of time like Warren Buffett.
We should be buying and selling right now to either reallocate our portfolios for the new year or to get our taxes straight for this year. We should not be buying and selling based on how well holiday shopping is going or what is going to rally the market over the next month. We should be looking at what we think is going to happen in 2010 and 2011 and make investing moves preparing for it. How long before the economy stabilizes? How long before the consumer starts spending and stops saving? What will become of healthcare? Preparing for these longer term questions will allow us to allocate our portfolio in a way that will benefit us. We won't have to worry about what the market is doing each day. We can sit back and make sure the future is lining up the way we think it will. As Warren has taught us, that is the best way to make cash money.
Subscribe to:
Post Comments (Atom)
Posts
what are your thoughts of the Jon Stewart vs. Jim Cramer? I feel Stewart had valid points, but was it our (American people) fault for trusting this man?
ReplyDeleteWhen you invest in a stock, it has to be your call. Stewart did have valid points as you suggest. I have read several books about Jim Cramer to see where he came from and how much validity he really has. He was a very successful hedge fund manager in the '90s. Where he differs from most is that he got out before the technology bust. When he was a hedge fund manager, he traded for himself and his fund as he should have. All hedge fund managers do this. They make large, quick bets in order to manipulate the market and make fast money. Now he is trying to help out little investors and not the traders. Everybody makes a wrong call. Sometimes we get so caught up on greed and making money fast that we just take whatever suggestions come our way. As investors it is our job to do the homework and pick out the best stocks for ourselves. It is great to get suggestions, but it is our job to do research and find out if it was a good suggestion. We cannot expect to always get good information. If something goes wrong we want to attack somebody. Jim Cramer seemed to be the best candidate at the time.
ReplyDelete