It is vital in my opinion that you decide very early on what your comfortable basic approach on playing the Stockmarket actually is. I will make an attempt to define an ‘Investor’ and a ‘Trader’ in a moment, but it is important to realise that lacking clarity on this key issue will be a major reason if you find the Stockmarket a painful experience and you make losses.
I count myself as an Investor. Unfortunately, the terms Investor, Trader, Dealer, Dabbler, Gambler, Player, etc. are often used interchangeably. I think the only valid terms in a theoretical sense with regard to the Stockmarket are Investor or Trader. Anything else comes under the umbrella term of Gambler and if this is your approach then you should forget stocks and get your butt down to Ascot.
I am not a betting man - I like certainties (or at least as damn near as I can get). However, I would happily lay down money (perhaps as much as a Tenner) that when 99.5% of Investors/Traders buy a share, they never ask a simple question:
“Why is somebody selling their shares to me, if they are such a screaming bargain?”
I also suspect that virtually no one reading this Blog will ever have read anything similar before - it is funny to me how so many vital topics of successful Investing just get ignored by the usual Financial Press - the only people likely to address such a topic are maybe Chris Dillow in the Chronic Investor and Richard Beddard on iii.co.uk. It is probably because too much of this stuff is Theoretical and not Real. At least with WheelieDealer you are getting the benefit of my Real Life Investment sufferings !!!
I bet you didn’t know the Great Bard, William Shakespeare, was an avid Private Investor did you?*
God I so hate this subject - I have no idea why I am writing this. I have been meaning to Blog away on this for weeks but every time I knuckle down to start it, my crafty primitive brain always seems to distract me onto some other subject. I definitely have a psychological problem with regard to Stoplosses.
The old saying goes “History never repeats itself, but it rhymes…”
This Blog is very much in line and explores a possible ‘Roadmap’ for how the remainder of 2014 might play out.
Some of you reading this will be aware of certain ‘Seasonal Investing’ patterns - the classic being “Sell in may and don’t come back until St Ledger Day” - which encapsulates the fact that the UK stockmarket, more often than not, outperforms over the Winter months compared to the Summer period.
You may have seen my Tweet around 8.30am this morning where I said I had sold my AstraZeneca AZN Spreadbet Position, and that I am keeping my Normal Shares in my Income Portfolio.
As ever, I made this Topslicing decision out of Market Hours last night while looking at my Stock Charts on the ShareScope software I use. My thinking is that since the recent nasty sell off in Markets Overall, we have seen a very strong and fast bounce over the last week and I cannot see that this can go much further in the short term. I will be issuing another Blog either tonight or tomorrow that investigates this further.
I have been inspired to write this Blog by seeing the sheer volume of information that goes around on Twitter, the Internet in general and via things like email.
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