David at Imperial Beach

Hi, I'm trying to improve my trading style, but I'm starting with little or no noticeable natural talent for investing. My first attempt was to buy an Int'l Bond Fund that had done well the prior year and hold it for one year. At the end of the year I had lost a few bucks. Not disastrous, but not what I would call a success either.

Years later, I now have a $10K nest egg that I'm trying to grow. My first foray was to buy a set of about 10 stocks with good pricing and fundamentals and a pleasing 6 month price curve (not too volatile, if you squint it might look like an exponential growth curve). The market was quick to show me the error of my ways. Some stocks didn't have any institutional ownership, which raised ...More a red flag. Others didn't have such a nice price curve if you looked beyond the 6 month horizon I'd used. Most of the stocks just sat there or dropped in price. I sold within days before loosing very much money. I did make a few bucks on AAPL and AE which offset most of the loss.

Then i turned to ETFs. My first thought was to put all my money in one nice safe investment that had done really well in the past (IAU). Again, not a very good idea, but this time I'd sold myself on the idea that gold was a tangible value and I fell in love with the idea of a safe investment that did really well, so it was emotionally harder to sell quickly. I lost several hundred dollars before I sold.

So, new change of attitude, the market is basically a zero sum game and no investment is truly safe because anything can be overpriced when you buy it, even if it looks like it's currently rebounding from a temporary low. Never fall in love with your investments. They're really bets that you can get in and out of the Ponzi schemes before others. Best to place lots of minimum bets (for me, 10 shares on reasonably priced ETFs and stocks) that you intend to sell at the first whiff of trouble.