So... What's an Investor to Do?

So, we have the four basic ideas, but the Market has been a real roller coaster ride. What's an investor to do?

We need to become conservative. We need to raise cash levels. We need to raise stops. We need to buy strong stocks. We need to buy 1/2 positions. We need to buy ETF instead of stock. We need to put emotions in our back pockets and look at the supply and demand charts.

But, most of all -- if a stock hits a stop loss and there is a loss -- take it! You can make up a small loss much easier than a large one.

Discipline - The Last Necessity

However you buy and sell stocks--fundamentally or technically--over the long-term or short-term, you must have discipline. You have to decide on a course of action and stick to it. It will make you consistent and consistency will, in the long run, lead to profitability.

If you notice over time that your strategy or discipline isn't working for you, change your course, but never do so emotionally. Emotion has no place in a portfolio.

The Importance of Stop Loss

In this current thread, the third idea is having a stop loss... and using it.

Not every trade will work out. When it doesn't, selling your losing position while it is manageable is preferable to watching your stock tumble into the basement and being hit with a total loss.

Have a specific and reasonable stop loss. Use it! Don't hope for something to bounce back because it may not. Just sell the stock and move on.

Remember, most of the time, 80% of your profits come from 20% of your trades. If you let even one bad trade go down 50%, that means your next trade has to double just to break even.