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Selling Low. People find it difficult to resist.

|Includes: Nortel Networks Corp. (NT)

 So it is widely agreed that prices in the stock market go up and down. It is widely despised that real estate prices go up and down also. Some people think that real estate only goes up, or that stock markets only go down. Obviously, the truth is that the market is moved by emotion and perception. The emotions of fear and greed, primarily.

As the big guy, mister number one, Mr. Warren Buffet says: "Be fearful when others are greedy, and be greedy when others are fearful."

If you're scared of losing your money, you sell, they sell, everybody sells and the market goes down. Simple, right?

I believe the best things in life are easy to learn and difficult to master. The challenge, the curiosity and interest of a quest to understand the hidden principles behind the market and financial products is what keeps me in love with this industry. There is always a better way to invest, another protection strategy to learn, another new product and tax rule. Endless changes impacting a near limitless universe of products.

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When I speak to financial planners since the crash of 2008, they are overwhelmed with client redemptions, sell orders, and market-wide meltdown. By the time the traders, brokers, money managers, mutual funds, self-directed investors, and advisors have sold their losing positions, the bottom has been reached. A few days after that, it's hit the papers, the investors start panicking and contact their financial advisors and planners to sell.. why? And even later, about 30 days actually, investors that only look at their monthly statements get the news in the mail. Then they want to sell... at the bottom. The reason that it's the bottom is that everyone who got out first, has now licked their wounds, figured out the next best place to put their 'Hot Money' and are waiting for the right price to jump back in to take the ride up!

Self directed investors, the best of them only halfway up the list of first out and last in, usually think they are better than they are. They hear a rumor to sell stock ABC because it's on the way down. What really happened is that someone is looking to buy that stock, and is telling everyone to sell so they can get in and buy at a lower price. The reverse is also true. Net truth, don't act on rumors.

Tips and rumors are fast, and they emanate out of the investment houses and brokers on the street. People who live and breathe the market all day, looking at the pricing screens, talking to the big investors and money managers. The last thing you want to do is act on a rumors that's days old. The news is 'priced in' the stock, and there is no longer any value to be had.