I don’t mean rules and regulations for investing, I mean your own rules! Have a plan and stick to it! An example of this would be to determine your asset allocation and only buy stocks that fit into your allocation when you need to increase the amount of stocks in relation to the amount of bonds in your portfolio. Conversely, sell your winners when you are over balanced in an asset class.
Another example might be to sell a stock if it hits your trigger price, regardless of what the reason might be. The point is that you can always rationalize your behavior, but when you are simply acting according to plan, then you are much less likely to act out of emotions like fear or greed. You might check out Cramer’s Stock Ranking Strategy to help you develop an entry and exit strategy.
If you liked this, you may also like:
Jim Cramer’s 10 commandments of stock trading.
25 Investment rules from Jim Cramer.
Cramer’s Top 5 Picks for Stocks to Buy
Cramer’s Bottom 5 Picks for Stocks to Buy
Good advice. One thing investors SHOULD NOT do is panic and take out all their money. I did this when I first started to invest. BIG mistake. Now I let it ride…..
Rules are good to keep some sort of framework in mind and helps you from making decisions that are driven by greed or fear.
[...] 1 Follow The Rules 2 Be Aware Of Taxes 3 Don’t Confuse Investing With Trading 4 Tune Out The Media 5 Don’t Tune Out Too Much 6 Pay Attention To Risk 7 Don’t Avoid Reality 8 Don’t Fall For Hot Stock Tips 9 Don’t Try To Time The Market 10 Try Before You Buy [...]